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Double Dipping

by Martha Stevens,
Hatfield, Missouri

Martha Stevens is livestock farmer who lives and farms near Hatfield, Missouri. This article is part of an ongoing series by Martha Stevens - Straight Talk - commenting on the life and politics of farming in Missouri and the U.S. as a whole.

Surprise!!! -- IBP "earned" a record $92 million during the last quarter of 1998. If memory serves me right, that was about the same time that independent pork producers were losing in excess of $50 per animal due to the drastic drop in market price. Not to say that IBP was the only packer guilty of this "double dipping" (low prices to producers; high prices to consumers). It just happens that IBP was the only one dumb enough to announce it for all the world to see! Of course, good old IBP sympathizes with those they ripped off; no doubt they cried all the way to the bank!

Surprise #2!!! -- Farm implement dealers are starting to feel the pinch. Dealers in the midwest expect sales to be down 20% to 30% this year. High inventories of both new and used equipment sit on crowded lots with little likelihood of being sold.

Equipment manufacturers, too, are bracing for a low-sales era by scaling back on both production and employees. When will the powers that be get it through their heads that destruction of the family farmer spreads like a wildfire sweeping across open prairie?

Agco, with 1998 sales 12% below those of 1997 and expected to go even lower in 1999, plans production and operating cuts of $50 million this year.

Case IH, which saw a 17% fourth quarter decline in revenue, has begun restructuring plans and reduced production, closing two plants and putting many of those workers in the unemployment lines.

John Deere reported a record total income for 1998, although the fourth quarter showed declines of $49.2 million. The company made this startling revelation regarding the "decline" in sales: "The decline was mainly due to lower sales and production volumes of North American agricultural equipment." Duh!!

New Holland, which announced a 50% joint venture with Ag Chem Equipment Inc. in February, said they expect the problems seen in 1998 to continue through this year, with sales of all equipment down by as much as 15%.

And so it goes. Ain’t concentration and consolidation in agriculture grand???! And it’s only just begun! Wake up and smell the roses, people!! A little support for the independent family farmer/customer might be in order, don’t you think?

Let’s take a look at what is happening in livestock production. From the dreaded Ag Census, Iowa (which is about as rural as you can get) in 1992, had 34,058 farms producing hogs; in 1997, that number dropped to 18,370; cattle operations there in 1992 numbered 43,780; in 1997, 34,548. And so it goes throughout the farm belt as independent producers are forced out of business and the mega corporate operations take over.

A good part of the current rural crisis can be laid at the door of government policy. Despite numerous farm groups and state leaders urging the USDA to enforce the Packers and Stockyards Act and Anti Trust Laws, that agency shows no inclination to do so. Thus, we have continuing secret sweetheart deals between packers and corporate agriculture, simultaneously decimating family farmers with low prices for their animals. The USDA, by failing to act, is allowing packers to aid in the demise of those who do not "fall in line" with the corporate agenda -- meaning, of course, becoming a "hired hand" on your own land.

And don’t you just love those politicians and economists who tell farmers they must just "tighten their belt?" Don’t they realize that the farmers belt is already so tight that his belly button is firmly attached to his spine? And speaking about "tightening your belt, " wouldn’t it be nice if those in DC would tighten theirs?

Today’s quote: "Our nation’s economy seems to be based on the belief that we shouldn’t practice it." -- Harold Coffin

Published in In Motion Magazine - April 10, 1999

Also read other essays by Martha Stevens