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.
Kayla, Bando, Nati, Justin, and the Chicken
I’m so glad you posted this. So true about corn and ethanol. I have some info to send you about another additive the EPA requires. It cannot be produced yet but big oil is paying a penalty for not adding it. The EPA has become a parasite, feeding off its host to survive. Thank you for informing your customers and followers. I do hope 2013 is your best ever.
Barb
Sent from my iPhone
Another additive the EPA will require in gasoline? Please tell me it is pastured pork!
Hello Guys!!
I am a new follower, and I didn’t have any choice after trying the sausage recipe!! Interesting post about the record year, I am in central Iowa and just started homesteading, but in speaking to a commercial farmer friend of mine, he was tickled at the smaller yield of his fields because the price was so high per bushel. They didn’t have a bad year at all, especially when you throw in the subsidies. There was actually a Congressman from Iowa commenting on farmers dropping crop insurance because they knew the feds would take care of them through disaster relief money. Its funny if you think about it…how often is just one farmer’s field affected? Its usually a disaster so they get relief assistance plus crop insurance but I digress….The market spoke and record prices….Why was it a disaster? Interesting that we were able to capture enough rainwater keep our crops watered through July…and did just fine. All it took was a little mulch, and forethought….I’ll get off my box now.
Keep up the good work!!
Pete
Hello Pete! I am so glad you enjoyed the sausage recipe! Iowa is a very interesting state. Because of the Iowa Straw Poll, every presidential candidate, Democrat and Republican, must knock on every Iowan’s door, every four years, and ask for their vote. I get the feeling there are a lot of corn farmers in Iowa weeding out those presidential candidates!
The farm caucus in Congress, all those senators and congressmen from farm states, make sure these subsidies continue. I am not surprised to hear that an Iowan Congressman recommended corn farmers drop their crop insurance. Why pay those premiums when you know you will be covered, no matter what?
We have to keep innovating, keep our costs down, and take care of our customers to make it. I would love to take the credit, but the truth is we make it only through God’s will, as He provides us every single thing we need.
Thanks Pete for your kind words! Good luck with the rain water harvesting, and keep up the mulch!
We are blessed to have a local farmer here in Rockport and TRULY blessed that it is you! Thanks for your perserverance against all odds. 2012 challenged my family in many ways that kept me from my home and from enjoying Four String’s goods on a regular basis. I look forward to a better 2013, including subsidizing my own garden produce with that from your farm to accompany many meals featuring your pastured pork and chicken. Best of luck to you and your family!
Hi Pat! We have missed you! I hope you have fewer challenges this year, and more delicious home-cooked meals. Best of luck in your garden–maybe this is the year it will finally rain!
And thanks again for the wonderful bottle of wine you gave me, that we toasted with on the mountain, the night I proposed to Kayla. That was the perfect touch! I hope to see you soon, Justin
Yet another interesting and informative blog, Justin. Infinite Love & Gratitude to you and for you, Kayla, and all the wonder of Four String Farm! What more can I say!? You bless us as you are blessed.
Thank you so much Diana! Thank you!
How are your Christmas gift hens doing? You wouldn’t happen to want a rooster, or twenty, would you? I’m sure the two hens would enjoy the attention. And everyone appreciates a daily rooster crowing competition, right?
All the best to you and Joe!
Oh, wow! Justin, how generous… Send them over. Not!!! But thanks for the giggle. Gregory (Peck), Penny, Mindy and Godiva are all well.
And I am here to testify that I KNOW what came first: at our place it is definitely the chicken. (Still no eggs) Thank goodness for Four String Farm!