Report 1-26-21

Is farm profitability in the United States untethered from the environment?

A common topic in agricultural publications is farm and ranch profitability, which may tie into some new research at the University of Wisconsin, Madison. The article, “Cropland expansion in the United States,” was published in the peer-reviewed journal, Nature Communications. This article reported that the U S is losing an average of more than1 million acres of grasslands, wetlands, and forests to cropland each year. However, the study points out that from 2008 to 2015, these conversions have produced marginal crop yields, while imposing significantly high costs to wildlife and insect populations. Researchers determined that when studied the land that was converted, they found that it disproportionately impacted the highest-quality habitat. For example, the conversions affected waterfowl nesting locations that had 40% greater duck accessibility. They also found that grasslands, which hosted three times as many monarch butterfly resources as typical land, were lost at a rate that was 10 times greater than had been previously estimated, and that this conversion continues to impact Monarch butterfly population recovery efforts.

This his study points out some of the ways that U.S. agricultural policy continues to have negative impacts on our environment, while failing to provide benefits to farmers and ranchers. During the eight year time frame covered in the University of Wisconsin study, crop and livestock profit margins have averaged near to or below the cost of production. Farmers continue to lose a running battle with low commodity prices by putting marginal crop land into production with the hope of increasing their total production enough to eke out slim profits. But farmers are facing other headwinds as well in their attempts to find profitability. Rather than developing farm policy that is good for farmer and ranchers, University of Tennessee Agricultural Policy Analysis Center’s Harwood Schaffer and Dr. Daryll Ray contend in their essay, Welcome to the age of increased variability”, that In the past three decades, US agricultural policy has been driven largely by: Crop input suppliers who want to maximize their sales of seeds, chemicals, and machinery; Commodity traders and merchants who profit from increased price variability; Users of storable commodities who want to meet their needs through subsidized crop prices that are generally below the full cost of production; and Crop insurers who receive significant subsidies to provide below-cost insurance policies to farmers.

Surely, we can craft agricultural programs in the future that will benefit both farmers and the environment.

American politician, sociologist, and diplomat Daniel Patrick Moynihan said, “The single most exciting thing you encounter in government is competence, because it’s so rare.”

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