Notes from an Iowa Farm: Prices, Politics, and Precipitation
These field notes constitute my seventh summer report from our Iowa farm. As readers of prior postings may remember, my wife and I own a medium-sized farm in east-central Iowa that produces corn, soybeans, and beef from a cow-calf herd. We are fourth-generation custodians of these acres — a long-term family relationship that is typical for many Iowa farms. The atypical dimension of our operation is that I am also a Professor at Stanford University, where I have done research and taught courses on the world food economy for more than 40 years. This piece by Walter P. Falcon was originally posted by Stanford’s Center on Food Security and the Environment.
The title for this year’s edition is probably redundant. Farmers throughout the world always talk about bad weather, low prices, and inept governments. That combination has certainly been front and center this year. The 8 a.m. gathering of farmers at our old Waubeek “restaurant” on the Wapsipinicon River continues to produce interchanges on the latest farm happenings, usually about who or what is to blame for distressed rural conditions.
There also seemed to be less banter this year and fewer new pick-up trucks. Trump trade-wars, with farmers as casualties, came up frequently in the conversations, as did concerns about the weather and the vagaries of the 2018 crop year. The year began very early, with corn tasseling by Independence Day — completely destroying the old maxim of knee-high by the Fourth of July; both corn and soybeans held prospects for record crops. Then in August the rain gods became agitated. We received 12 inches of rain in 10 days. Nearby creeks and rivers overflowed; soybeans got driven into the mud from the hard rains and the accompanying high winds; and we dodged a nearby tornado spinning away about four miles from us.
Wet conditions caused white mold and spurred “sudden death syndrome” in some soybean fields. Corn ears that had not “fallen” (going from their upright-pointed position on the stalk to the downward position that occurs with maturity) began to collect moisture, creating mildew and ear rot inside the husk. Crops that had looked so promising at the start of August looked more dubious by mid-September.
There is always a tendency to generalize nationally from local conditions, but the prevailing neighborhood view this year has been that the USDA has overestimated the harvest. However, while these circumstances have created considerable discussion about climate change and extreme weather events, for farmers, the concerns are less about climate science and more about risk, farm profitability, and upcoming conversations with bankers.
The weather uncertainty has been compounded by price and trade issues. Soybean prices plunged to a nine-year low, and in mid-September cash prices in rural Iowa markets were about $7.25 per bushel. That level was only about 70 percent of prices in 2013 — even without adjusting for inflation. At the other end of the crop-price spectrum, hay and straw markets have gone crazy in the opposite direction. Both are in short supply, largely because of drought in the southern plains and floods in the northern Midwest.
The livestock sector also poses a murky outlook for (the typically large) farmers who specialize in raising pigs and/or feeding cattle. Though helped by low feed prices, both the pork and beef sectors are plagued with large numbers of animals on feed, with uncertain exports to China, Mexico, and Europe, and with high prices for replacement animals. Fortunately for us, we at least had an impressive set of calves from our cow/calf herd.
As an “outside-insider” (especially one from California) it has been especially challenging for me to read the current political attitudes of farmers. Iowa voted for Trump in 2016, where he ran very strongly in rural areas. However, Iowans do not talk politics very openly, except perhaps at the Iowa State Fair (referred to by one local journalist as “corn dogs with a side of politics”).
Even without the obvious political overlay, the fair was spectacular. It attracted more than a million visitors — remarkable given that Iowa has only 3.1 million people in total. The traditional cow, sculpted in 600 pounds of butter, stood alongside a butter version of a “1919 Waterloo Boy,” a forerunner to John Deere tractors. Then there was also the new culinary treat — pork belly with brown sugar on a stick. This specialty was complemented by a demonstration of foot-stomping wine making and, of course, there was superbull (3,030 pounds) and superboar (1,165 pounds)!
There was lots of campaigning for state-level offices, and also for the races for the U.S. House of Representatives. At the national level, one would have thought it was 2020. Presidential hopefuls showed up in large numbers. One candidate known by almost no one, John Delaney, had already visited all 99 Iowa counties — a “full Grassley,” named after Iowa’s long-term Senator who has made 38 annual visits to all 99 counties an integral part of his political strategy.
The question that I most hear from my liberal California friends concerns buyer’s remorse. Their assumption is that with tariffs, trade, turmoil, and Trump, farmers must be up in arms and ready to change their political allegiance. My conjecture is that many are not changing — at least not yet — and that the reasons are complicated.
Iowa’s population is now more than 90 percent white, with the farmer percentage even higher. Many farmers, and especially rural women, do not care for Trump or his shaky moral compass; however they are not resonating to Democratic minority messaging either. They like tax cuts, and especially the prospects of E15 ethanol that the president and secretary of agriculture have been dangling in front of them.
Soybean farmers might seem to have the most to complain about as a result of the Chinese imposition of retaliatory tariffs on U.S. soybeans as part of the ongoing trade war. Soybean exports to China through July 2018 were down more that 50 percent as compared to last year. On the other hand, the value of total soybean exports was off by only 8 percent as a consequence of substituting customers among U. S., Brazilian, and other exporters.
Government policy is also at work. While all of the key farm organizations are on record as preferring trade to subsidies, farmers will certainly cash government checks. Under a supplemental program announced by the president (some would say cynically as an election-year “sweetener” to offset the effects of his wrong-headed tariff policy), soybean farmers with yields of 50 bushels per acre will receive a special bonus of about $40 per acre.
Whatever one may think about farmer political preferences, the economics of their changing that support is much more complicated than first meets the eye. My conclusion is that Iowa will continue to be a fierce battleground state, and that neither Republicans nor Democrats can take Iowa for granted in either 2018 or 2020.
Iowa, like America as a whole, is at a crossroads between its idyllic past and a hi-tech future. Nowhere is this tension more obvious than amongst communities of the state’s Amish population, whose ancestors settled in Iowa during the last half of the 19thcentury. The more devout among their number do not believe in motors or electricity, and the local scenes are very bucolic: large white houses, for their typically large families; horse-drawn farming implements and horse-drawn buggies tied up in neat rows at the church; women in long skirts and bonnets and men with bib-overalls and wide brimmed hats; and wonderful baked goods, cheeses, quilts, and other specialties for sale at roadside stands. Yet, in the 21stcentury, finding enough farmland, in keeping with their tradition of providing all sons with space to farm, is causing some of these communities to break apart. The correct type of schooling is also an issue. And adapting religious norms raises both questions and eyebrows.
It is interesting that a high percentage of all of the roofing of barns and other farm buildings in the entire region is done by Amish men. But how do they get to job sites? If it is too far to drive their horses, they now deem it acceptable to ride in autos with others, so long as they do not drive. A friend of ours is essentially the “Uber-driver” for the Amish roofers of Hopkington. It is interesting, in Iowa and the entire world, what happens when economics and religion clash.