John Block Reports from Washington

When House Ag Committee Chairman Peterson speaks, I suggest that it's wise to listen. He is not going to make a lot ofpredictions unless he is confident of the support from other Committee members. This week, I was in a meeting with Secretary Johanns. He has introduced a serious Ag program proposal, however, I recall, what House Ag Committee Chairman Kika de la Garza told me during the early 1980s. He said, "Don't forget Mr. Secretary, the way the system works is the Secretary proposes and the Congress disposes." Chairman Peterson supports the safety net for farmers but he said he likes the concept of making agriculture more market-oriented. He said, "Farmers don't want government payments. They want to get their money from the marketplace." Absolutely!

In response to the nervousness among livestock producers, he said, "We're going to plant nine million more acres of corn this year."

He noted that, over the last few years, livestock operations have been able to get feed at subsidized prices. The Chairman went on to say, "Frankly, we've been under-pricing our food in this country. People need to calm down a little bit and realize that the livestock sector has been one of the biggest beneficiaries of this subsidy system." I agreed. We've never made money on hogs with cheap corn. I would add that the biggest beneficiary of our supports has been the consumer.

Chairman Peterson went on to say, "We are re-pricing agriculture. This is a good thing, even though it causes some short-term pain." As Keith Collins, USDA Chief Economist, points out, "the price of oil jumped from $20 to $60 but the world has coped. The cost ofproducing pork going up 6 cents per pound should not pose an insurmountable problem."

I say, any consumer that is willing to pay $2 for a bottle ofwater that is free out ofthe faucet won't hesitate to pay 15 cents more for a pork chop.

Keep your ear to the ground and listen to what the Chairman has to say.

Until next week, I am John Block from Washington.