The economy may be crashing down in pieces all around us, but it's a great time to be a farmer in Harford County.
Corn prices are well above $5 a bushel, soybeans at $12-plus. Winter wheat is hitting records daily and is almost $10 a bushel in local spot markets. Alfalfa hay ranges from $165 to $300 a ton, mixed hay $155-plus and straw at $100 plus. Raw milk prices have yet to retreat below the $20 per 100 pound threshold they cleared last year.
Well, to be fair, beef and hog farmers aren't doing as well, because those rising crop and hay prices hit their pockets, too, and the horse farmers have the same issues they have always had, declining race track related revenues in Maryland, coupled with those same higher costs for feed and bedding. Still, in agriculture, as in most segments of the economy, the rising tide will eventually lift the remainder of the boats, because the beef and hog people and horse people will cut back their stock and wait for the consumer demand, nationally and internationally, to take them back up.
The front page of the Feb. 15 Wall Street Journal had graphic detail of how the farm economy is booming nationally: Since June 2005, the Dow Jones grain index was up 80 percent; the DJ petroleum index, down for much of the same period, still hovers about neutral. In the past year, corn and soybean prices are up 25 percent. For those keeping score, corn and soybeans are the main crops grown in Harford County. Milk used to be king here, but its economic importance has been declining in the past 20 years. Still, in December, the price of raw milk produced in this region was 41.4 percent higher than a year earlier, according to the USDA marketing administrator's bulletin for the Northeast marketing area.
On top of the runup in many commodities prices, Harford County has become more aggressive in its efforts to get farmers to sell their development rights for agricultural preservation purposes. At the risk of running the program dry of money, the county council has accepted more than 40 properties encompassing some 4,100 acres into the program in the last year alone, at an estimated cost of more than $43 million, while at the same time boosting both the amount of money individual farmers can be paid and the property tax credits program participants also receive.
It's fat city indeed.
Farmers are good at reminding us that there's always a downside risk involved in their business. For instance, that corn which sold for $5.23 a bushel on area spot markets last week brought just $2.10 less than a decade ago. Fuel and fertilizer, two major inputs in farming, will continue to increase because of our global dependence on petroleum. Every grain farmer is one bad crop away from potential ruin. Dairy and beef farming on the scale done in Harford County have been, at best, just break even propositions for years.
And, let's be a little selfish, and point out that while the farmers are seemingly lining their pockets, the people doing the lining are you and me. Overall, according to the federal government, food prices have risen about five percent in the past year. We pay significantly more for just about everything at the supermarket, milk, bread, eggs, you name it.
Driving the ag economy boom is both global demand for food and the increased use of ethanol in motor fuel, the latter which created a new and booming market for corn and other commodities. And, as we have seen so many times in the past 200 years, some foreign economies that were supposed to compete with the U.S. on production of food commodities still haven't been able to do it on a sustained basis. The United States remains the world's anti-hunger insurance policy.
When commodities prices are high, what do farmers generally do? They produce more, and more, and more and more, until the glut causes prices to retreat, supposedly. And, the eternal optimists among us would probably say those higher prices we pay now for food are a welcome trade-off for less dependence on the Arabs and others for oil. What's a few more bucks each week at the supermarket checkout, to keep pump prices in check. If only it were that simple.
In Harford County, there's another tangible upside: It's way more profitable to farm right now than it is to grow houses. For every farmer who stays in business, there's one less potential development of McMansions.
Typically, every positive economic trend has a negative reaction. So, while we are holding off the bricks and mortar out in the hinterlands of Northern Harford, many of our pocketbooks, including the county government’s, are likely to be a lot lighter.
Hey, but the farmers are happy. And, as everybody knows, this ain't Utopia. Some get to laugh; others get to whine.
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