We Must Reclaim Lost Acres
After this year's loss of 11 million soybean acres, it's no secret that new American Soybean Association (ASA) president John Hoffman is all about changing that scenario next year. “We need to be a consistent supplier of quality soybeans and we need more acres in 2008,” says the fifth-generation grower who farms 1,400 acres at Waterloo, IA.
“Domestic and overseas customers want to know that we're going to be a reliable supplier of high-quality products,” he says. “This year, at a 575 million bushel carryover, we have a comfortable margin. Next year we'll need to produce more soybeans.”
Besides just working through farm bill details, just how is he planning to correct that downshift in acres?
First, and he's thought a lot about this, is forming coalitions with non-traditional partners that have mutual interests.
“Top issues on their (non-traditional partners') minds are energy, health and the environment — much like ASA's,” Hoffman explains. “For example, the American Truckers Association and ASA share a common goal of maintaining a reliable supply of high quality biodiesel.”
Also, ASA is forming a healthy oils coalition and groups like the American Heart Association may be part of that. “We need to have dialogue with these types of groups to lay the groundwork for placing new, healthy soybean products in the pipeline. We need the supply before they create consumer demand,” he says. “Right now, since zero trans fat labeling, demand for low-linolenic soybeans is outpacing the supply.
“We're working with other non-traditional partners, too, like environmental groups and top-level individuals at companies such as Wal-Mart and McDonalds. They're interested in products for their customers that are produced in environmentally friendly ways,” Hoffman says. “Many of their goals and objectives fit well with ASA. They want a safe, wholesome, sustainable food supply for their customers, too.
“We're even working with environmental groups like The Nature Conservancy and World Wildlife Fund — even though we usually don't think about them being farmer friendly. They are among a growing list of environmental advocates who recognize that there's an ever-increasing demand for food in the world and there's only a finite amount of productive land,” he says. “They'd prefer that land be intensively farmed to produce more per acre than risk putting fragile rainforest or grasslands into production.”
Hoffman also plans to turn his attention to the shortage of rail cars and rail lines once the locks and dams issue is over. In fact, he says ASA has recently helped form a soy transportation coalition to better influence shippers and carriers. “We all know that profitable railroads with competitive rates will improve our basis. We may need to go to Congress to reform some procedures of the Surface Transportation Board, which has oversight over railroads. But it won't happen overnight because railroads have a powerful influence in Washington, D.C.,” he says.
“John has lots of leadership experience and has been particularly helpful with the farm bill,” says Rick Ostlie, immediate ASA past president and now chairman of the board. “But best of all, John has the right connections in Washington and is informed on the issues. He'll represent soybean farmers well.”
The year ahead will be a busy one, but Hoffman says he's ready. “I sought this position at this particular time because of the farm bill. I wanted to be a part of ensuring we have a good safety net for U.S. soybean producers, especially since our costs have gone up 50% from the last farm bill,” he says.
“My grandfather had a saying: ‘Many hands make light work.’ ASA has 25 member states with literally hundreds of volunteer leaders. Every ASA board member is a recognized leader in his or her own state. My objective is to spread the leadership tasks around and call on the talents and abilities of many hands,” he says.
We're Going Through Historic Times
“If you were going to pick a time to be president of NCGA (National Corn Growers Association), this is it,” Ron Litterer says emphatically as he begins his tenure as president of the 33,000-member organization.
Litterer grows 1,500 acres of corn and soybeans at Greene, in north-central Iowa. He also finishes 6,000 hogs a year and is in a partnership farrowing operation with four other farmers. So when he talks about the value of livestock to the corn industry, he walks the talk.
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“The livestock industry and export buyers who have traditionally bought our products are worried about their supply, but I'm convinced we can supply energy needs and all of our end users. We all know it's not going to be $2 corn, but we really think corn growers deserve a higher price in the market,” says Litterer.
“The marketplace is going to function and drive the changes, just like it did this year when farmers planted more corn acres,” he says. “The market will work and I believe we can supply enough corn for exports, feed and fuel.”
That's not to say, however, that the focus on energy and its effect on the corn industry are only occurring in the U.S. “This is a worldwide transition,” he says. “We're going to see more corn acres in Argentina, Eastern Europe and South Africa. We're going to see a shift of acres around the world on all crops.”
On the ethanol front, Litterer doesn't see the price of crude oil dropping and that will continue driving ethanol expansion. But one of the issues ethanol will be facing, and soon, is the blenders' wall. Ethanol is currently only blended at a 10% rate, unless it's E85 (85% ethanol).
“Even in Iowa we don't use 100% of the 10% blend. We blend about 80%, and Iowa is a high ethanol user,” he says. “We need to change the gasoline reformulation to go beyond that wall and also increase the availability of E85 and the number of vehicles that can use it. We need to do that to accommodate the number of plants coming online in the next year or two. That's going to have to be resolved or the ethanol industry can't continue to grow.
“If we could go to E15 or E20, it would change the whole market dynamic in how much ethanol we could use domestically,” he says.
Although corn is easier to haul to the local ethanol plant, Litterer doesn't at all object to a cellulosic future, admittedly 5-10 years away. In fact, he sees it as an evolution of the ethanol industry.
“We think we can be part of that,” he says. “For example, utilizing corn cobs for cellulosic ethanol won't reduce the organic matter in the soil so we can continue to maintain our soil quality and reduce erosion. It looks like a good fit.”
Litterer believes one of his strengths as a leader is in implementing farm policy issues. “Face it, a lot of what happens in any industry is policy driven and there's no question that's where you can affect real change,” he says.
Current NCGA president Ken McCauley couldn't agree more. “He (Litterer) has lots of experience in public policy and his work on the farm bill has helped all of us in the past year.”
This year NCGA has language in the House farm bill that includes a revenue-based option. It sees an increased risk going forward with spiraling production costs, plus higher rents and land prices. “We'd like to see improved risk management replacing price-based subsidies,” Litterer explains. “What we're talking is improving risk management and integrating it with Federal Crop Insurance.”
He points to the Farm Safety Net Improvement Act introduced in late July by Sens. Dick Durbin and Sherrod Brown as a step in helping take farm policy to a new level. “The Senate is recognizing the potential of what we are trying to achieve,” he says. “The Durbin-Brown legislation emphasizes a market-based approach.”
Litterer believes that what he brings to the table is “a common-sense approach to issues. I also think I can move things forward and get buy-in from others. Still, it takes a lot of folks working together, not just one guy.”