OUR VIEW: SILVER LININGS IN THE DROUGHT OF 2012?

SEPTEMBER 2012

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(Posted Wed. Sep 5th, 2012)

By Rick Tolman, NCGA Chief Executive Officer

 

Winston Churchill once said, “For my part, I consider that it will be found much better by all parties to leave the past to history, especially as I propose to write that history myself.” A decade from now—as we look back, how will we write the history of the Drought of 2012? I hope that I will look back and remember key lessons that can be gleaned from this experience and that collectively we are able to say that we are stronger and wiser because of having gone through the experience.

 

What nuggets or silver linings might there be in the most devastating drought of our life time? Consider:

 

  • The importance of risk management and crop insurance. Certainly, the impact of the drought on crop producers has been and will be mitigated by the widespread adoption of crop insurance and the shift in recent years in farm policy to focus more on Risk Management. A drought of this magnitude would have had a much more severe impact on the crop production sector and the Federal Treasury, had we not made these changes. This argues strongly for continued movement in this direction and passage of a new farm bill similar to what was recently passed in the Senate. Perhaps also there needs to be a similar focus in the future for the livestock industry.
  • The value of advanced seed technology. Another very clear lesson from this drought is that we have much healthier and more robust crops than we did during the last major drought—1988. By most measures and memories, the drought of 2012 is considered to be much more severe in its depth and breadth. Our national average corn yield in 1988 ended up being 84.6 bushels to the acre. At this point in time, despite greater severity, the current USDA forecast is for a national corn yield of 123.4 bushels per acre. Our crops weathered this drought much better than the seeds of 1988 would have – or for that matter – the seeds of 1998 or even 2008. We do not yet have bulletproof seed, but what we do have is seed that, because of superior germplasm, advanced plant breeding techniques and the wonders of biotechnology, is much better able to fend off environmental stress and fulfill a greater measurer of its higher genetic potential. There should be few, if any, critics of modern seed biotechnology after the experience of this year.
  • The impact of modern agronomic and production methods. Some have compared the severity of the drought of 2012 with that of the Dust Bowl. We have no Dust Bowl talk in 2012, nor little concern that there will be one. Why? It is due in large part to modern agronomic and crop production methods. No-till or minimum-till methods keep more moisture in the soil. Modern agronomic practices put more organic matter in the soil. Filter strips and waterways and contours all have made our modern farming industry not only more productive but also more environmentally and ecologically friendly and less susceptible to drought and erosion and many of the things Mother Nature throws at our farmers. At a time when, in the popular press, today’s farmers are routinely misrepresented and maligned for their production practices, let’s give credit where credit is due. Modern farming practices pay off big time.
  • Economic signals to produce more grain worldwide. A crop loss of the magnitude that we have in the United States in 2012 could not have helped but to have spread panic throughout the rest of the world. This time, so far, it is having far less impact on the rest of the world. Why is that? It is because for the last five years, the strong and growing demand for grains and oilseeds in the United States and elsewhere in the world, driven in great part by the growing biofuels industry, has sent a strong economic signal to farmers around the world to expand production. And they have. As a result, there are new exporters, such as Ukraine and India, and there has been a renaissance among some traditional grain exporters that had let production languish due to low world prices. Brazil, Argentina, South Africa, and others have picked up the slack and will fill in to replace what the United States is unable to export because of the impact of the drought. It reflects a relatively healthy world grain sector that is responding to market signals and investing in and adopting technology and increasing production. Score a big win for the efficacy of the market and the price signals of growing demand.
  • We have benefited from pulling together. Crisis typically breeds stress, anger and finger-pointing in the U.S. ag sector. While we have had some of that within agriculture in 2012, it has been much less than in similar circumstances and, in my opinion, much less than it might have been. One case in point: NCGA’s officers know by name and cell phone number their counterparts in the American Soybean Association, National Association of Wheat Growers, the U.S. Grain Council, National Cattlemen’s Beef Association, the National Pork Producers Council and many others. They also know and have met with leaders in agri-industry from the equipment, grain trade, seed companies, ethanol industry, meat processing industry and others. Much of the reason can be attributed to the formation of the U.S. Farmers and Ranchers Alliance, where more than 60 farm and ranch groups have organized, joined by nearly 20 agri-industry companies – to work together for the collective betterment of U.S. agriculture. The result of this interaction and communication has borne tangible fruit in this time of crisis in 2012.

Ronald Reagan once said, “While I take inspiration from the past, like most Americans, I live for the future.” The future of U.S. agriculture burns still bright. The Drought of 2012 hopefully will soon be but a footnote and a blip in our productivity trends. But a large measure of that will depend on what we learn and take away from this experience.