Mark Williams, Farwell, Texas, cotton farmer and president of Plains Cotton Growers, Inc., predicts a handful of challenges for agriculture looming on the flat horizon of the High Plains.
Fortunately, he sees a few solutions already in place or on the way to help folks meet some of those trials and tribulations.
“Water,” Williams said in his president's address to the PCG annual meeting, “is our number one concern. We're running out of water. And drought affects irrigated as well as non-irrigated farmers.”
He said farmers who irrigate have to pump more often and at a much higher cost the past two years because of increased energy expenses.
Increased production cost claims second place on his list of challenges. “I remember spending $40 to $50 per acre for irrigation 10 years ago. I'll spend from $100 to $150 per acre to irrigate this year. Natural gas prices are way up. I look at gas prices every day before I check on cotton markets.”
He said prices for pesticides also will increase. “Herbicides, especially, have jumped. Some farmers say they spend as much as $100 per acre for weed control. We have to find a cheaper way.”
Williams said seed costs, including technology fees, machinery, repair and labor have also risen.
“Unfortunately, the price of cotton has mostly gone down, so profit potential is stretched to the limit. Recent price improvements have not been enough to affect the bottom line.”
As prices increase the loan deficiency payment decreases a like amount.
Continuing attacks on the farm bill also concerns Williams. He's especially worried about recurring attempts to increase payment limitations. “Senator Grassley is not likely to compromise,” he said. “So we have to go to our friends in Congress and ask for their support.”
He said cuts in the agricultural program would mean severe hardship to southern farmers. “Congressman Combest did get some guarantees that cuts in the ag budget would not happen,” he said. “But a lot of false assumptions and negativity still exist.”
Williams said surveys indicate that the public generally holds positive feelings abut farmers. “Our mission should be to educate legislators,” he said. “They just finished a farm bill and already some are looking for the next one.”
Tinkering with farm programs, he said, “makes it hard to plan for the long-term.”
He said the next piece of farm legislation will be harder to pass than the last was.
“Trade poses a significant challenge to the entire agricultural industry,” William said. “It's extremely hard for farmers to keep up with trade policy.”
An inequity in crop insurance coverage is fifth on Williams' list of concerns. “The last drought pointed out the difference between coverage and cost in the Midwest and the South. I can only afford to buy coverage for 50 percent to 65 percent of my crop. In the Midwest, coverage of 75 percent and up is common. I don't have room in my budget for a 35 percent loss year.”
He sees no answer for the discrepancy. “But we'll continue to work with the Risk Management Agency and look for solutions.”
The final concern on Williams' list, but not necessarily the least important, is the continual decline of the U.S. textile industry. “We've lost a 4 million-bale milling capacity from the very best customer we have.” He said losing 40 percent of the manufacturing capacity indicates the need to maintain the three-step program and other measures to keep U.S. cotton competitive.
Williams said solutions include the farm bill signed into law last fall. “That's our safety net,” he said. “The program will offer about 13 cents per pound in counter cyclical payments. Without this program, maybe we would get 6 cents with AMPTA, but maybe not. It would be severely difficult to get anything in our current situation with mandated budget cuts and a war.”
He said the program also allowed farmers to update yields and acreage bases. “And the counter cyclical payment was extremely important.”
He lists de-coupled payments as both a good and a bad part of the program, bad because if farmers take the payment and don't plant, they may weaken agriculture's infrastructure that has already taken some hard hits from declining rural community revenues.
“But, we don't depend on Congress for ad hoc assistance every year. It took two years to get the latest disaster assistance approved.”
Williams said increased funding for conservation programs also qualifies as a farm bill benefit. “We're trying to make certain that regulations for conservation funds fit this area.”
He said the farm bill could have been better but was probably the best folks could hope for under the budget constraints.
“We needed some sort of production control but we got nowhere. I think we would have had better prices with some sort of control mechanism.”
He said the farm bill produced winners and losers. “The winners were those able to update yields that had been good for the past few years. The losers had to update yields that were not so good.”
He said a farm bill that was supposed to have been guaranteed for six years may be subject to the budget axe. “Grassley started trying to make changes as soon as it was signed into law. And we've had some negative publicity, especially from the Environmental Working Group. The program has been slow to implement, too.”
To maintain the farm bill and improve profit opportunities, Williams recommends farmers work through their associations.
“We must work together. We develop proposals at PCG and then take those to the Texas Cotton Producers and then on to the National Cotton Council.”
He said NCC's strong Washington presence gets attention for the industry.
“And we must continue to build relationships and tell legislators our concerns. We have to get to know them.”
Williams said cotton farmers are up to the challenge.
He and PCG Executive Vice President Steve Verett recommended that growers support the Committee for the Advancement of Cotton, a political action committee that speaks for cotton in Washington.
“They need your contributions,” Verett said. “That gets us access to legislators. It's all about access. We have good people in Congress, but we know it takes a lot of money to run a campaign and we want to help those who help us.”