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What Happened in Rural America in 2012

posted on December 28, 2012


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America’s waterways are a dramatic example of just how much things can change in a year. 

This past August, the Mississippi River was more than 15 feet below normal at Memphis.  That’s an all-time low, and it reflected a 55 foot decline from the all-time high water mark set just one year earlier.

Other events in 2012 were more in-line with prevailing trends:  Commodity prices were favorable, net farm income soared to yet another record high, and farmland values appreciated rapidly.

Market to Market looked back at 2012 and discovered a year that vividly demonstrated the impact of changing seasons – in rural America AND in life.  Paul Yeager explains.  

2012 began in much the same fashion as the previous year, and the one preceding it: as the U.S. economy struggled to recover from the worst downturn since the Great Depression. But in rural America, the stage was set for some commodities to soar into record territory.  

Despite the 2011 harvest of the fourth-largest corn crop in history, supplies were tight.  In February, the Agriculture Department cut its February estimates for domestic corn ending stocks to 801 million bushels.  That reflected a 30 percent decline from the previous year and it left little room for adversity during the 2012 growing season.   

Livestock producers felt the impact immediately.  Retail beef prices spiked as the U.S. cattle herd fell to 90.8 million head, reflecting a 2 percent decline from 2011 and the lowest inventory since 1952.

In March, beef-state governors, meat industry representatives, food safety hawks and a media horde descended on northeast Nebraska.  The hastily planned tour of Beef Products plant came amidst a public relations nightmare over a product known within the industry as “finely textured beef.”

Gov. Rick Perry, R-Texas : “Let's call this product what it is and let pink slime become a term of the past.”

Republican Governors Terry Branstad of Iowa, Rick Perry of Texas, and Sam Brownback of Kansas launched an all-out media pushback during their visit and seized the opportunity to explain -- and defend -- finely textured beef.  Lawsuits followed as did plant closures in three states in the wake of the debacle.   

As the calendar advanced to spring, USDA predicted America’s farmers would plant nearly 96 million acres in corn – the most since 1937.  Warm and dry conditions enabled growers to plant at of the fastest paces in history, and initial estimates called for record corn production of 14.8 billion bushels up 15 percent from 2011.  

But as the ink on USDA reports was drying, conditions in America’s fields were deteriorating. Some regions went weeks – or even months – without measurable precipitation.  And as record heat gripped much of the Grain Belt prospects for record crops wilted and the worst drought in 50 years quickly became THE story of 2012.  

Roger Elmore, Iowa State University: “We have almost a perfect storm here, and that’s in a negative context, because we have corn at the most critical period of time in terms of silking and pollinating. We have very high temperatures. We have very little probability of rainfall and we have dry soils. Those three things combined in this quote, unquote perfect storm, are not positive for yields.”

In Kansas, where temperatures in some places exceeded 115 degrees in some areas, corn that began the year looking healthy, green and tall failed to pollinate.  

Ken Wood, Chapman, KS: “See that one didn't - mostly didn't pollinate. The ones that did pollinate a lot of them don't just have any size to them at all.  There is just a few kernels on there most of that.”

Crop conditions plummeted across the country.  And in its latest estimates, the government predicted U.S. American  growers would harvest an estimated 10.7 billion bushels, reflecting a 13 percent decline from 2011 and the lowest production since 2006.

USDA pegged soybean production at 2.97 billion bushels – 4 percent lower than the previous year and 12 percent lower than the record year of 2010.

2012 also marked the final year of existing laws authorizing federal agricultural programs. But lawmakers failed to come to terms on the massive piece of legislation.  In a climate of tightening fiscal policy, budget hawks called for reductions in federal spending.  The Farm Bill was no exception and subsidies known as direct payments – which compensate growers regardless of prices or yields -- were an early negotiating casualty.  

Another key safety net program facing cuts was federal crop insurance, which pays farmers through a combination of government and private funding sources. And Secretary of Agriculture Tom Vilsack explained why the Obama Administration preferred to cut safety net programs for farmers over those providing nutritional assistance. 

Secretary Tom Vilsack, USDA: “In the president’s view, these insurance companies were perhaps in a better position to stand these difficult times than the folks who are currently struggling with tight budgets and can't afford to put enough food on the table.”

Farmers and ranchers often are identified as the primary beneficiaries of the Agriculture Department’s $145 billion annual budget.  In reality, nearly 75 percent of spending this year was on programs like the Supplemental Nutrition Assistance Program, or SNAP; Women, Infants and Children, or WIC; and other nutrition assistance programs.

"The bill passes 64-35.”

In June, the U.S. Senate passed its version of the Farm Bill, eliminating direct payments to farmers and cutting agricultural subsidies and conservation spending by about $2 billion per year.

But the Senate measure largely protected 46 million citizens relying on the supplemental food assistance program, formerly known as food stamps. Senate leaders considered the Farm Bill’s approval a major victory due to its bipartisan tone and -- more importantly this election year -- because of the legislation’s considerable savings: which are estimated at more than $24 billion over the next decade.

Sen. Pat Roberts, R – Kansas: “This is a good bill. Is it the best possible, bill? No. It is the best bill possible."

But House lawmakers wanted bigger cuts in nutritional programs.  And while the House Agriculture Committee approved a Farm Bill of its own, the measure proved to be too controversial during an election year and was never made it to the Senate floor.

One sector of the economy that improved dramatically in 2012 was energy production.  Driven by high prices and new -- and in some cases, controversial -- drilling methods, domestic production of crude and other liquid hydrocarbons was on pace to rise 7 percent to 10.9 million barrels per day.  The improvement marked the fourth year of increased domestic production and, reflected the largest single-year gain since 1951.

Those facts were not lost on those seeking the presidency.  And despite the Obama Administration’s move to delay a decision on the Keystone XL pipeline until after the elections, the president touted his energy policy. 

President Obama: “Since I took office, our dependence on foreign oil has gone down every single year.  Last year, we imported 1 million fewer barrels per day than the year before.  Think about that."
 
Gov. Mitt Romney: "Mr. Chairman, I accept your nomination for President of the United States of America.”

Governor Mitt Romney and President Obama criss-crossed the nation explaining how they would move Americans from the unemployment lines to the assembly lines.

Obama became the third consecutive U.S. President to win a second term.  Democrats maintained control of the U.S. Senate and Republicans held on to their majority in the House.  And when the dust settled from the most expensive elections in U.S. history, Congress is still bitterly divided as evidenced by the current fiscal cliff stalemate. 

“Thanks for watching, I'm Mark Pearson. Have a great week.”

But the story that hit closest to home here at Market to Market happened early in June, when Mark Pearson -- the very heart and soul of this program – unexpectedly passed away.

Hosting Market to Market for more than 20 years, Mark was a tireless advocate for agriculture; and he never passed up an opportunity to educate others on its importance.

Mark loved people.  He was blessed with an innate ability to make them feel special – and to make them laugh. 
One of his favorite sources of humor came to fruition in 2011, when he was immortalized as a bobblehead.

Mark Pearson:  “And again one of the fun things we came up with, and they’ve been hugely popular… And it’s almost embarrassing for me to say it… No its not.  These have been hugely popular, the Mark Pearson bobble head.  Whoops, ohhh, I’m showing you the good side.  Ha Ha Ha!”

The ceramic mini-Mark actually proved to be quite popular and holds special meaning for U.S. Secretary of Agriculture, Tom Vilsack.

Tom Vilsack, Secretary of Agriculture:  “It’s a reminder, and now an even more poignant reminder, of uncertainty of life.  Every day is a gift, and you’ve got to make the most of it. I don’t think… Obviously Mark didn’t live long enough.  But if he were here today, I’m pretty sure he would come back and say, ‘I didn’t waste a day.’”

Mark loved farming almost as much as he loved people. He was a tenacious worker, who somehow always found time to make others feel special. He was gregarious and kind-hearted, yet he took the business of agriculture very seriously.  

And just as farmers often pass their operations down to their children, Market to Market passed the baton to the next generation in July.  

“Hello, I’m Mike Pearson.  I’m honored to follow in my father’s footsteps – and Chet Randolph’s before him -- as the host of Market to Market.  It’s a volatile time in agriculture right now so let’s get started.  
The big story in rural America these days, of course, is Mother Nature…

And so, despite developments in Washington, and in the Heartland – and even here at Market to Market, the more things change the more they stay the same…


Tags: Congress corn drought farmers fiscal cliff Mark Pearson Mike Pearson news Obama oil Romney soybeans Tom Vilsack USDA

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