HOW DOES MEXICO REINVIGORATE IL RURAL COMMUNITIES?

mexicoMay is World Trade Month and this week in particular has been designated to celebrate agriculture’s contributions to U.S. trade.  If you’ve always wanted to know more about how farmers contribute to our economy via trade, you’ve come to the right place!

(In reality, I’m guessing you’ve never considered that farmers are a major contributor to the products leaving the U.S. and the economic boom that trade provides American citizens.  This is your week!  Learn something!)

Mexico is a hugely important buyer of corn nationally, and also has a great impact as a buyer of Illinois corn. Our river transportation system sends much of our corn directly to the Gulf of Mexico, where it makes the short trip to Mexican markets. This should remind us how important our river transportation system is, and with it, the need for repaired and upgraded locks and dams.

Illinois Corn Marketing Board partners with the U.S. Grains Council to expand export opportunities for corn, ethanol, and DDGS. USGC leverages Illinois farmer checkoff dollars with matching dollars from USDA to expand the work. Learn more about USGC’s work in Mexico at www.bit.ly/1zsm5Ml.

Here are some specifics about Mexico as a buyer of corn:

  • USDA weekly sales info as of 4/23 says Mexico is the top market for U.S. corn this marketing yr, buying 9.5 MMT (million metric tons) so far
  • Mexico imported 10.4 MMT of yellow corn during the 2014 marketing yr, making it 2nd largest market for U.S. yellow corn
  • Mexico imported more than 1.5 MMT of U.S. DDGS last year, making it the second largest market behind China
  • A critical trade deal made booming U.S. grain sales to Mexico possible – read more at www.bit.ly/1FKvRuE
  • Mexico farmers see dramatic results in DDGS feeding trials, building confidence, sales – more at www.bit.ly/1OTJKMM

What’s this mean for you as a non-farmer, an eater, and an American?

  • Vibrant and growing markets mean increased farmer income.
  • Farmers reinvest additional income into their farms.
  • This money drives the Illinois economy, provides jobs, reinvigorates rural America, and promotes investment in new technologies to make agriculture more efficient.

FIELD UPDATE

Jim Reed Emerging CornThis picture was taken from Jim Reed in Piatt County Illinois.

This corn was planted on 4-15-15 and emerging on 4-29-15. Conditions for planting in his area of Piatt County have been excellent. Most in the area are done planting corn and beans. Virtually all the corn has emerged and looks very good with little to no stand loss due to poor germination. Many bean fields have emerged and also look very good. He said they are starting to feel a little dry as of 5-7-15 so they are hoping for a little rain over the next several days.

TOP FIVE ANSWERS ON FARM SUBSIDIES

Americans have questions about farm subsidies – and why shouldn’t they?  Americans deserve to understand what their taxes are paying for and why.  So here’s the top five questions we get on a semi regular basis and the best, short answers we can provide.  Do you have more questions on farm subsidies?  Ask away in the comments!

1. Why should tax payer dollars fund farmers anyway?

The government got involved in helping farmers stay afloat because they were interested in food security.  Our country needs to guarantee a safe, affordable, DOMESTIC food supply and not put ourselves in the position to have to import food because American farmers go out of business.  The food security portion of this equation is what makes government payments to farmers different than other businesses or industries that are also reliant on weather or market conditions.

Helping farmers stay in business also supports American rural economies that are built on farming and agriculture.  Without farm subsidies, rural communities would be completely desolate and Americans would be forced to urban areas to find work.  In essence, farm subsidies that keep farmers in business help many more Americans that don’t farm, but live in rural communities.

Illinois, farm, field, farmer, country, scenic

2. I don’t want to pay a farmer to not farm!  That’s not right!

There was a time in our history when farmers were paid to leave their land fallow.  The “set aside” program sought to control supply and increase commodity prices.  But we haven’t done this since the 1990s.  The “set aside” program was unauthorized in the 1996 Farm Bill.

3. I don’t really understand what farm subsidies are paying for then.

Government payments to farmers currently come in the form of subsidized crop insurance.  Because farming relies on the weather and is so unpredictable, farmers must insure their crops or face investing a ton of money to plant a crop only to have Mother Nature ruin their crop and leave them with no income for the year.  Crop insurance protects farmers when this happens.

But private insurance companies find the proposition too risky.  No private company can withstand a weather event like the 2012 drought we experienced here in IL.  So the government subsidizes crop insurance, making it available for farmers and encouraging them to protect themselves.

Farmers do pay a portion of their premium AND what amounts to an average of a 20 percent deductible in the event of a loss.

(Stay tuned for a more in-depth look at crop insurance and what it means to farmers in the near future!)

Marty Marr Family

4. Farmers are small businessmen and should compete in a fair and free market just like all other Americans, without government assistance.

Yes.  And that would be amazing.

But consider that farming is a different business model than most.  In most other small businesses, the business buys inputs at wholesale prices, builds a product or completes a service, and then determines the cost for the product or service based on the input costs.  Farmers do not have this business model.buy wholesale, pay retail

They must buy inputs at retail prices, pray for great weather, and accept whatever commodity price the market dictates for that month and year.  Yes, opportunities exist for farmers to mitigate risk, but they should not and can not be compared to all other small businesses because they do not get to dictate market prices that cover their cost of production.

Also, back to the first point, guaranteeing that we have affordable access to domestic food supply is somewhat different than guaranteeing access to barbershops or photographers.

5. Farmers made so much money last year.  I don’t understand why farm subsidies are still needed or even considered by Congress.

Yes, farmers did have a great year in 2013.  Commodity prices were high because of the low corn supply after the drought, but farmers still grew a lot of corn.  They did well and they didn’t need/use their crop insurance.

But like all American families know, you have good years and you have bad years.  Farmers are well versed at saving money back from the good years like 2013, to pay for the bad years like 2014 (and probably 2015!).  Government subsidized crop insurance is still needed because bad years always happen no matter how good the good years were.

If you’re still curious about farm income, read ARE FARMERS RICH here!

I am very excited to answer your questions about farm subsidies and crop insurance.  Please leave a comment!

Lindsay Mitchell 11/14

Lindsay Mitchell
ICGA/ICMB Marketing Manager

RADIO SPOTS HIGHTLIGHT ETHANOL’S CLEAN AIR BENEFITS

The American Lung Association in Illinois (ALAIL) has placed a large advertising buy on three Chicago radio stations this week. The point of the ad is to educate listeners on how higher blends of ethanol can help improve air quality. Illinois Corn Marketing Board invests farmer checkoff dollars with ALAIL to help promote ethanol education and to facilitate grants that help offset the costs of the necessary pump upgrades to make higher ethanol blends available at gas stations.

You can listen to the radio advertisement for yourself by clicking here.

The advertisement, which sounds more like a Public Service Announcement, goes like this:

What do you think about your choices at the pump?
Do you wish you could find something to feel good about when you fill up?
Something that’s cleaner burning, and renewable?
Are you looking for a fuel that’s better for the environment?
Higher ethanol blends are the answer. Ethanol is cleaner burning, renewable, and it’s a high performance fuel.
The choice is yours. The Choice is Clear. Choose clean air. And a clear conscience.
It’s time to Clear the Air, Chicago, with higher ethanol blends.
A message from the American Lung Association in Illinois.

 What choices are you making at the pump?

Don’t forget, if you drive a flex fuel vehicle (FFV) you can use any ethanol blend up to and including E85.

If you drive a car model year 2001 and newer, you can choose E15, a 15% blend of ethanol. It is available at a growing number of gas stations in Illinois and typically runs 3-5 cents less expensive than regular gasoline. Its octane rating is 88.5.

Tricia_BraidTricia Braid
Communications Director