Issues of the Day

August 18, 2022

Hello, everybody out there in farm country. This radio commentary is brought to you by the National Corn Growers Association, CropLife America, and Renewable Fuels Association. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.

And now today’s commentary-

I will be going to the farm in Illinois this Friday and will update you on what I see back there next week. Today I plan to touch on a number of subjects that are in the headlines every day. Start with the Russia-Ukraine war. I don’t think we know how it will end. The NATO countries continue to provide military weapons for the Ukraine forces. But it’s not clear if either side is positioned for any big victory. This war could go on for a long time. One positive development with the help of the United Nations and Turkey: Russia is allowing ships loaded with Ukrainian corn, wheat, and other grain to be shipped through Black Sea ports. Hungry people in Africa and Asia can’t wait for it to arrive.

It looks like we are in a better position now than a month ago to feed the world. Grain prices
have come down from their highs back in June. That means the market is not as concerned about
supply. The drought concerns have eased. Yes- we do have drought, but Midwest agriculture for
the most part has been spared. The recent government reports predict our yields to be not as good
as last year, but still pretty good. Our food prices are still high but have fallen a little. Grocery
prices are 13.1 percent higher than one year ago. Beef prices are worth watching. With the
drought in many of our states west of the Mississippi River many cattle ranches don’t have the
feed to feed their cows. So, they are off to market.

The cost of fuel has fallen. It doesn’t cost 5 or 6 dollars per gallon today. So far inflation has not
hit our farmers as hard as it could. In the early 1980s we paid 16 to 18 percent interest on
borrowed money to pay for fertilizer, seed, and all of the operating costs. Thousands of farmers
and ranchers went broke. They couldn’t pay back to the bank what they borrowed. Then the
country banks went broke. I was Ag Secretary then and I met with Federal Reserve Chairman
Paul Volcker. I wanted him to cut the interest rate down. It was killing us. “No not until inflation
comes down” he said.

It's not that bad now. We don’t want to go there.

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