Iowa Ag Review: Volume 6, Issue 2
Livestock producers are efficient producers who use feed rations containing the lowest cost (or least-cost) nutritive additives. As a group, they have not shown a willingness to pay a premium for feed grown from specialty seed that has been modified to meet the nutritional needs of different livestock species in different regions of the country. Will these producers ever be prepared to pay the premiums required to pull identity-preserved feed grains through the pipeline?
Call it election year politics, or say that the third time is a charm. Either way, instead of waiting for a last-minute dogfight, Congress wrote into the budget a supplemental income assistance package for U.S. producers. With the two previous packages, Congress took a wait-and-see attitude, and did not pass the legislation until the fall of each year. This year, Congress opted to take a more preemptive approach as producers face another year of low commodity prices. (See the related article, “Five-Year Outlook for Iowa Agriculture,” on page 8.) The package earmarks $7.1 billion in assistance to be disbursed before the end of the fiscal year, September 30. It contains $5.5 billion in direct assistance that most policy watchers agree will come in the form of an addition market transition payment. The remaining $1.64 billion is put aside for program and specialty crops. Expect disbursements to be similar to the oilseed portion of last year’s package.
Samarendu Mohanty joined the staff of the Food and Agricultural Policy Research Institute (FAPRI), part of CARD’s Trade and Agricultural Policy Division, in 1994 as a research associate. He is now an adjunct assistant professor with FAPRI and is teaching a senior-level commodity trading and price analysis course.
Crop and livestock producers in the United States are facing another challenging year. Prices for corn and soybeans have been hovering at or below cost-ofproduction levels for more than a year, and large global supplies and a strong U.S. dollar have led to weak export demand, hampering price recovery.
The Internet is fast becoming the focal point for new investments in agriculture. Venture capital is funding Internet startup companies that want to transform the way business is conducted in agriculture; and traditional agricultural suppliers and processors are making online investments. But what is likely to be the outcome of such investments?