John Block Reports from Washington

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

And now for today’s commentary—

Today, I’m going to hit on several issues.

First, a word about the drought. It has been devastating to many farms and small businesses. Not much good will come of it except one thing. Maybe some of the critics of GE crops will come to recognize the value of corn varieties engineered to withstand drought. Maybe they will appreciate that we need all new technology to feed a hungry world. It’s time for them to stop fighting something as valuable as genetic engineering.

Another hot button issue is corn processed into ethanol. I understand why some livestock and poultry operators may not like ethanol. I raise hogs. Corn prices are high and that hurts the bottom line. However, gas prices are spiking up now. Ask yourself, how high would they be if we didn’t have ethanol? Maybe $5 per gallon.

The drought has messed up a lot of things. Food prices will certainly go up next year. But not much more than they went up this year – 3 percent this year, maybe 4 percent next year.

Seed prices and fertilizer prices will certainly go up next year – more than 4 percent. Everyone will want to raise corn. It is going to take some time to work our way through this difficult problem.

Turn the page. Will we get a farm bill before the election? I say no, but I wish we could. The Congress has so much on their agenda. Yet, the election is foremost on their minds. Here is a fact about the farm bill that is often not known by many people. 80 percent of the money in the farm bill goes to food programs – food stamps, school lunch, WIC, etc. Some people would like to separate the food programs from the farm programs and have two bills. The problem with that is that the supporters of nutrition spending support the farm programs, and the farmers support the nutrition programs. “You scratch my back and I’ll scratch yours.” There is value in having allies when trying to pass a bill. And the food nutrition lobby is powerful.

There is a lot of uncertainty about next year. The federal government doesn’t even have a budget. The Senate hasn’t passed a budget in 3 years. How irresponsible is that!

Oh well – stay tuned.

In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.

Until next week, I am John Block in Washington.