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News Analysis: March 31, 2008

posted on April 1, 2008 at 11:12 AM

Beck: Well, the USDA put out their annual crop predictions report on what is going to be planted this spring. What did you find out?

Pitt: Well, they announced it this morning, they typically do right before the spring planting season do a survey of farmers to try to find out, to get a sense for the landscape and find out what farmers plan on planting and this year it looks like corn acres will be down about eight percent, soybean acres up I believe about 18 percent. So, it looks like a number of farmers, and this was somewhat expected, will be switching from corn to soybeans.

Beck: A lot of people thought we'll continue with corn because of the high corn prices, the ethanol demand but yet switching some to soybeans. Why?

Pitt: Well, there are a number of reasons. Part of it is the economics. There are a lot of input costs for planting corn especially if you plant corn on corn, you know, several years in a row you have to replenish some of the nutrients in the soil. And so the higher input cost is part of the reason. Soybeans also are bringing a good price now. So, a number of farmers have taken a look at things and decided that perhaps the soybeans would be a good plan for them next year. But we do have to keep in mind that this is a really early report, is an early survey. Some people I think are speculating that the fact that today's report will change prices a little bit so farmers could actually go back and say corn prices may go up a little bit so maybe I'll go ahead and put some more acres in corn. So, it's not a hard and fast number.

Beck: This is important to Iowans, in part, because we live off our rural economy. But also what does it mean to us as purchasers? Will we see any differences in prices at the supermarket or pump or things like that?

Pitt: Probably. I think there is speculation about how it might impact food prices. If there are fewer corn acres, of course, that could, again, increase the price of corn, which is used in so many things. It is the primary feedstock for ethanol plants, of course. It also is used in a lot of food. It is also used to feed hogs. Hog farmers right now are struggling with profitability already so it's not going to make that situation any better. So, yeah there is a ripple effect but I think there are those who will argue that food prices are more affected by energy costs than they are by commodity prices. But that's a debate that people have all the time.

Beck: Another debate that is occurring at the Iowa statehouse right now is what to do with Iowa's $6 billion budget. We've only got a couple of weeks left supposedly of the session, the legislative session and this is where they sort of turn their attention to the state budget. What do you hear?

Pitt: Usually the last couple of weeks of the session they really start rolling on the budget. Part of it is prompted this week by the fact that on Friday the revenue estimating conference, a group of experts on budgetary issues will get together and they take a look at a number of factors to try to determine what the revenue will be coming into the state so lawmakers will have a little bit harder number to go by. They'll see whether tax revenues are remaining high, remaining higher than the were, the same, whatever so they can kind of plug those numbers in. But they will probably start discussing, this week Republicans have been a little anxious and have been a bit critical of the Democrats which have a majority in both the House and Senate over not really revealing much about the budget. Democrats are putting all that together and I think there are some people who want some sunshine on the whole thing, they want to know where are we getting the money from and where are we spending a lot of the dollars.

Beck: Right, and any concern as we look that while revenues are high right now that they have to be careful? Everyone expects a downturn eventually to hit the Midwest like it has in other parts of the nation.

Pitt: I think it depends on the economist you talk to but I have talked to a number of economists for a previous story that I had done for the Associated Press and they did mention to me that they expect perhaps a slowdown sometime in the summertime. But at this point no one really knows. It kind of depends a bit on how much Iowa's economy is affected by the national economy overall.

Beck: One of the other bills that is expected to come up for debate in the Iowa Senate this week deals with open records, open meetings and maybe a lot of Iowans don't know that much about it. But as reporters that cover these kinds of things this is a big deal.

Pitt: It is a big deal and it's an issue that a lot of people don't deal with unless they go to a city council meeting or a county supervisor's meeting and they need something from their government. And they find in some cases those government entities either are not familiar with the law and under state law in Iowa a lot of records are open, meetings should be open and we find in many cases that's not true until someone steps in and makes it happen. This bill is an expansive bill, it makes a lot of changes to the state law and it updates it considerably and it also creates a new board that would oversee a lot of the open records, open meetings issues and try to make it a little bit more enforced because it doesn't seem to be enforced right now to a serious degree.

Beck: So, put some teeth in there and given Iowans a place to go if they feel like they aren't getting the information they need.

Pitt: Exactly. And one of the issues would be the cost because the board does have a cost as far as staffing and those kinds of things.

Tags: agriculture Iowa news