I heard a news story that 2012 was the best year ever for farmers in America, a record year. As you can imagine, I was intrigued by this story.
It turns out they were talking about corn farmers; specifically, large-scale corporate corn farms. Industrial corn farmers made more money in 2012 than ever before.
Government Subsidies, Crop Insurance, and Ethanol
Why did big corn farmers do so well in 2012, despite the record drought, the worst in our nation’s history? For starters, these corporate farms received $15 billion dollars in government subsidies in 2012. These subsidies are annual payments, designed to help minimize risk in the farming business.
The vast majority of the money goes to big corporate farms. Many farm CEO’s have publicly admitted that they don’t need these subsidies; but still they take them.
On top of these subsidies, corporate farms also received record levels of government-backed crop insurance payments in 2012. Not only that, big corn farms enjoyed a guaranteed market for their product in the form of federally mandated ethanol production, that we are all forced to purchase with our gasoline at the pump.
The drought in 2012 did cause a serious shortage of corn. This shortage drove up corn prices, especially feed corn, to record high levels. And because there was less corn to harvest, operational expenses at corn farms were at an all-time low. Big corn farmers reaped a windfall of profit in 2012.
So, considering the inflated price of corn, the savings in operations expenses, the ethanol requirements, the crop insurance, and the annual government corn subsidies, corporate corn farmers had a record year in 2012. It was their best year ever.
Feed Corn at $600 per Ton
In 2012, a record number of dairy, turkey, and pork farms closed. The rising price of corn made it enormously expensive to feed animals. Small-scale family farms took the hardest hit, with a staggering number of closures.
For perspective, here are some local numbers: On our farm, we often paid more than $600 per ton for feed corn in 2012. Four years ago, we paid less than $200 per ton, and usually around $150 per ton. A ton of feed sounds like a lot, but believe me, the tons go very quickly. At $600 per ton, feed corn is killing to small farms. So much for government subsidies taking the risk out of farming.
Four years ago, gasoline cost around $2.00 per gallon. However, in 2012, gasoline was up to $4.00 per gallon, in part because of ethanol costs. We burned a lot of fuel in 2012 driving our porkers to the butcher, not to mention hauling trailers full of feed corn from the mill back to the farm. Feed corn and fuel put a lot of small-scale family farms out of business in 2012.
Even though our costs doubled or tripled in 2012, we obviously could not triple our prices to our customers. There is a recession on, and our customers are feeling it, just like we are. We are in it together.
Food prices in general rose by more than 10% in 2012, and they will rise by more than that again this year. The record high price of corn is the single greatest driver of that increase. As a society, we pay for our corn many times over–in taxes, in fuel, in cans of Pepsi-Cola, in fast food burgers, and in lost farms, closed because of the price of corn.
Our small farm does not receive subsidies from the government of any kind. We don’t enjoy crop insurance or guaranteed markets or tax-payer sponsored windfalls. We pay for those programs in many ways, but we don’t benefit from them.
We continue to exist for one reason: because of you. When you go down to Coastal Bend Health Foods and purchase our products, you keep our farm going for another day, week, month. When you visit GLOW and enjoy our chicken, turkey, duck, pork, or fresh produce, you keep us going. Not only that, you help those local businesses make it as well.
Another Record Year
We set our own record in 2012; we survived it. And the reason we are still around is because of you.
Thank you, friends, thank you so much for your partnership in 2012. We truly appreciate every pork chop, every chicken, every dozen eggs, every tomato, every leaf of lettuce you bought from us in 2012. We hope you enjoyed your food as much as we enjoyed bringing it to you.
Kayla and I are looking forward now to a new year. I have a very good feeling about 2013. I think this will be a record year, our best year ever.