NEW CASTLE, Ind. — Farm income may not remain as strong as
it has been, but ethanol will continue to play a crucial part in the
Doubling property taxes and tightening margins are likely to
challenge farmers’ bottom lines, though Indiana lawmakers are talking about
changing the formula used to assess the value of farmland, noted Kent Yeager,
Indiana Farm Bureau public policy director, who spoke at the seventh annual
Farming and Agribusiness Breakfast held by the Community Foundations of Hancock,
Henry and Shelby counties.
“It’s hard to keep up with the amount of change taking place
in agriculture, but you notice it more if you’re not doing it every day,” he
“Back in 1977, my dad would talk three times a week about
how farming had changed since he was a kid, and though I thought we’d never see
that kind of change again, we’ve seen even more change since the introduction of
biotech seed in 1996.”
“We’ve had a lot of change in the last several years in
people interested in food policy,” the public policy specialist said. “The rise
of different operations, such as goat farms producing cheese, as well as
agritourism, all give the chance for commercial farmers to put a face on
He said risk mitigation has contributed to great farm
productivity in the U.S. and that he believes the government structure has
resulted in citizens sharing the risk to contribute to an abundant and safe food
Yeager stressed that the ethanol industry is very important
to agriculture and that the Renewable Fuels Standard is needed.
Ethanol plants and livestock producers struggled with high
corn prices resulting from the drought in 2012, though ethanol blenders have the
option of using surplus credits from prior-year blending in the form of
Renewable Identification Numbers to meet the current standard, he noted.
“A lot of farmers know how important ethanol is, but most
people don’t realize that farm prices and margins are driven by ethanol,” he
“Ethanol is fueling corn prices through a market-based
system related to oil prices rather than a traditional feed base.”
He said that while ethanol is not the only answer to the
country’s energy needs, it works well with current technology and also produces
an abundance of products.
Yeager said cellulosic ethanol is likely to be produced at
$150-per-barrel crude oil prices combined with technological breakthroughs and
implicit carbon prices, though biofuels will not come without a strong
“I hope the other conclusion people reach is it’s important
for farmers to have crop insurance to manage risk, and there is a public benefit
to having risk management and conservation in the farm bill,” he added.
“A lot of money in the Environmental Quality Incentives
Program is helping people deal with the challenges they face on their
U.S. farmers produced 272.5 million tons of corn for the
2012-2013 year, down from 313.9 million tons produced for 2011 and 2012, he
By the same coin, U.S. production of soybeans has declined
greatly since the 1960s, giving way to emerging markets in Brazil, which now
produces more soybeans than the U.S., Yeager said.
“We’ve had two years way below the trend, but we bounced
above the trend a lot, too,” he said.
“We could end up with a 15-billion-bushel corn crop and
prices beginning with the number three — it’s part of the uncertainty in