Midday; The outlook for the Minnesota economy

Ridge was down 14 points the 20 transportation index was down about six and a third points. The 15 utilities was up a fraction the 65 stocks index was down about four and a half points. A reminder that midday on Monday is made possible by Metropolitan Federal Bank serving the nation with stability trust and dependability and a reminder that live coverage of current issues and events on Minnesota Public Radio is made possible by the public affairs fund contributors include the Norwest foundation on behalf of the nor' west bank in your community. This is Minnesota Public Radio a member supported service. And this is K S J end 13:30 Minneapolis St. Paul. The high today predicted to be 55 degrees. And the time now is 12 o'clock Danielson reporting in St. Paul we bid you good afternoon and we welcome our two studio guests Don Frederick and WILLACY can who will be hearing from in just a few minutes as we begin the call in portion of our program talking about Minnesota's agricultural economy the planting season and the impact that world grain supplies will have on

what Minnesota farmers can expect in the way of prices. The rain across large parts of Minnesota the last week or so has delayed spring planting for some farmers but of course the rain is good news for farmers since virtually all of the Midwest farmland is short of subsoil moisture following last year's drought. Farmers across the upper Midwest have begun planting corn and soybeans. The region's largest crops mainstreet Radio's John B-1 went to Cottonwood County in southwestern Minnesota. To farmers who had come through last year's blazing summer followed by the dry winter it might have seemed like the sky had forgotten how to rain so there was never a more welcome sound than the sound of steady soaking rain heard this past week in much of the southern two thirds of Minnesota. Gary thoroughly new farms north of Wyndham in Cottonwood county had to put off starting his corn planting because of the wet ground. But he didn't mind.

You know we badly needed rain and that might have so maybe $10 which is short of money sure. So we're going we need when we get 20 miles to the west near stored in Farmer Dennis Johnson watched the rain from his kitchen. He was catching up on paperwork until he could get back in the fields. Johnson says his soil is about five inches short of moisture. Oh look so we maybe have the pattern change a little bit here and you were getting some talk of that now. So if we can you know but we're going to need a lot of rain coming in this bring it to grow fill back up again and to be optimistic you. Will know all over Minnesota farmers are showing at least enough optimism to put crops in the ground for another year. Dennis Hanson of Wyndham has planted some of his corn. He says he's doing things a little differently this year because of his powder dry subsoil.

Welcome to the 1000 was. Sitting in the ground place. The chemicals and tap this year instead and they're putting them in the ground. And that takes it away and make it worth. It. It's going to go in place and try to dry it out or get it done. This one passes despite last year's drought most farmers came through 1988 in pretty good shape over the winter government reports on crop production and farmers incomes repeatedly exceeded last fall's expectations. Some crops were devastated and many farmers needed the money provided through the government's emergency drought relief package. But for most farmers crop prices last fall which were the highest in years more than made up for reduced yields. Jim Christensen is cottonwood county's agricultural extension agent. I think in some ways 88 was a good year for farmers. Maybe you know maybe they had some big crop of 87 they held over that this sold for good prices last summer. I mean that was in the bin they knew they had it. So I do

know that the average of what farmers paid in federal and state income tax was way higher than the year before. So incomes were up and the real trouble for farmers could come in 1909 depending as always on the weather and on market prices. What pulled a lot of crops through last year's dry summer was the reserve moisture in the soil from previous years. That Reserve is gone in most areas. So experts say another drought could be truly disastrous. That prospect has prompted farmer Dennis Johnson to buy crop insurance on his corn for the first time. We've always carried it on the beans just to get a little more susceptible to hail. And this year we looked at the court also. When you come in low short I'm moist Your it's a little Hedges You need protection. The other thing that worries farmers is the dip in commodity prices since last fall. Corn prices have fallen more than a dollar to about 7:25 a bushel

corn and soybeans are still well above the depression like prices of a few years ago. But with farmers planting more acres this year extension agent Christensen expect prices to continue falling through the summer especially if the rains come. One exception could be wheat the nation's wheat surplus is down to almost nothing. And it appears the winter wheat crop will suffer major losses in Kansas and other states. State officials say Minnesota farmers will plant 17 percent more wheat this year than last in order to take advantage of the seller's market. Farmer Gary Thiel lein expects to get considerably more for each bushel of wheat than he got last year. I think it's about four you know four bucks. That's over a buck higher I'm sure. I think it weighs. To 80 or somewhere around there. It's higher this year as they watch the market prices in the sky above Minnesota farmers are in the uncomfortable but perennial position of wishing bad luck on

farmers elsewhere. They say that's the reality of supply and demand in a world market county extension agent Christensen. Well the best thing that could happen to Minnesota farmers is the rest of the corn was on the dry side and we were getting those timely rains and gave us at least an average crop. But of course the worst case scenario would be the opposite the double whammy of failed crops and low prices. Christensen says that's a real possibility especially for unfortunate farmers in dry pockets of the state. And he says this year with the federal government tightening its belt farmers with crop failures aren't likely to get the help that they got last year. In Cottonwood County I'm John be when reporting. One of the interesting things about the spectator sport of farming is that it's impossible to know the answers to some of these questions posed by John B when in his report we have two gentlemen in our studio who will take a shot at it. On the last WILLACY Can the president of the Minnesota farmers union former DFL state lawmaker from the Twin Valley area still farming with his family in the Twin Valley

area and on Frederick state executive director of the ALCS the agricultural stabilization and Conservation Service a farmer from southeastern Minnesota near the Rochester area involved in livestock production. Welcome to both of you. Thank you. I wonder now if you can react to the report especially to that very unhappy sounding position that some farmers might find themselves in the so-called double whammy facing the prospect I suppose as much as anything in and around the central Minnesota area that if they don't get rain in that portion where they're very short of rain and haven't gotten much so far higher prices wouldn't do much good they wouldn't have a crop. Well Dan that's that is a real concern. As you know over the weekend some of the central area did get a bit of a shot of rain I think Willis just told me something like a half inch or maybe it was you said Stearns County. The southern part of the state has gotten substantial rains. I myself got four inches on my farm this last week. That should help considerably. Oh definitely.

It's gone it's a long ways towards getting at least getting the crop and getting the hail and pastures up. Well as as best you can tell is this one of the most precarious years that farmers in Minnesota have faced for a long time in the sense that if things break one way they could have a very good year. Very high prices for commodities or if things break another way you know rain is could be a disaster. Oh that's correct. We farmed. Personally I farms in 1949 and I don't recall a spring that's been. I had to kind of uneasy feeling that we've had is as farmers trying to anticipate what kind of year we're going to have. We came through as the report indicated a year ago because of our reserve moistures and we were quite fortunate in some areas of the state in that that Reserve did carry through a fair crop. Other areas of the state of course were devastated last year especially the central part of the state. But we all went into the spring with a shortage of subsoil moisture and that puts us at the mercy of those timely rains to provide that surface moisture this year for a crowd.

Don how would you characterize the general well-being of most Minnesota farmers. They have survived obviously the depression they have come out of that that apparently is now at an end how are they standing from our observation the AC as it looks. Pretty promising quite frankly our sign up is down our figurine sign up is going to be done. We don't have the figures in at this point where I can give you hard figures but it appears to us that that's going to be down. We sign up is down significantly and you have to explain for city people like me what that means when the sign up is down and why that's good. OK the reason is Dallas Farmers are optimistic they think there's going to be a pretty fair crop. They have either contracted some crop ahead of time with a fairly good price or they are in anticipating a good price so that's the big reason and wheat is is we're the last day of sign up we had several guys coming in canceling out of the week program lock stock and barrel because they're going to plant fence row to fence for one week. Now they have either contracted got a good good price on their wheat maybe they had some of the ban

and they sold it and they're anticipating a fairly good crop. Well this would seem to indicate that those who survived the agricultural depression in Minnesota or other parts of the country than those who remain are facing pretty good prospects at least according to what Don describes. I think we face again the uncertainty of what does this all mean if we should have good weather globally this year. We are at a point where we could have again a lot of overproduction in terms of what the market will consume. And you know that's what a lot of farmers are betting on that they're indicating at least in their planning intentions that they're going to gamble on the market being such that they're going to be able to move that commodity through the market and generate a good income. Again it's the volatility of food production that you can't predict. As we go into into another crop year and I think it points out again that food production is a unique business and that the weather does have major impact and we can go from there. The potential real shortage of food if we have drought

again serious across the country and oversupply in one year and planting in tension indicate that's a real possibility if we get good weather. All right that's the voice of WILLACY Can Who is the president of the Minnesota farmers union and also with us in the studio today Don Frederick the state executive director of the C.S. the agricultural stabilization and Conservation Service. He can is a farmer from the northwestern Minnesota area and Frederick is a farmer from the southeastern Minnesota area. Although both of them have led other lives as an independent Republican lawmaker Mr. Frederick and Mr. he can as a DFL state lawmaker for a time. Now we're going to open the phone lines so that listeners can join us with their questions if you'd like to place a question to our guests. Call us at 6:58 6000 in the Twin Cities 2 to 7 and 6000 listeners outside the twin cities within Minnesota can call us toll free no charge for this call at 1 800 6 5 to ninety seven hundred twenty eight hundred six

five to ninety seven hundred. And in the Twin Cities two to seven 6000 have the impression that the. Grain supplies worldwide are at a low level perhaps at their lowest level in recent history so that that margin for error is very thin. Willis says on the crop of wheat and soybeans our reserves are very low. And so they are subject to the weather to a greater degree than the corn corn or still we still have a good reserve in the United States in terms of our supply of corn. Don anything to add to that. Willis's right that's exactly where it's at. Weed is very short but corn supplies at least in this country are very adequate. And of course both of you as well as Minnesota farmers watch what's happening overseas and now we have the current round of trade talks underway in Geneva where United States officials are attempting to negotiate with other countries to lower some of the barriers to international trade. Well as I have the impression that a lot of our potential overseas partners still see the United States as a very wealthy trading partner and frankly

because of their somewhat smaller economies in some cases they're still not too interested in opening their doors to overseas trade especially buying U.S. farm goods. Well it certainly is a lot of diversity in global agricultural production you go from the United States where we have a very modern family owned agriculture to third world countries where they still farm much like our ancestors did when they came to this country and settled it so why disperse it in terms of that agricultural production base. The business that we've had with producers in other countries. They are very concerned especially the exporting countries are very concerned about the kind of farm program we've had these last several years where we've had a very strong government involvement in our exports and has been programs and some of the government participation in our sales overseas and so there's a real pressure on the part of some of the other countries to talk about some of the things that we do to sort of subsidize these export trade Now

certainly some of the other countries are subject to doing the same thing European community for example and so I think it's time that we do meet and talk about some of the trade distortion things that are taking place but we also have a very strong concern in our organization about the direction of the U.S. position in that trade discussion so yes it's time to be talking here is a need to talk but we also need to be realistic in what we propose and what we hope comes out of these trade negotiations done farmers for a long time made a lot about this country's cheap food policy using. Various kinds of programs and incentives to purposely keep a lid on the price of food in this country to satisfy consumers and that figure generally being cited somewhere between 16 and 20 percent. What middle class consumers pay for the cost of their food. Do we still have a cheap food policy is food still in that range of about 16 to 20 percent for disposable income may be a little less than that at this point. But if yes we still have cheap food policy in this country. Farmers by and

large you think you'll find will agree that the farm program basically is the cheap food policy. It's supports last year was in 1908 the federal government spent about 25 billion on the federal farm program will spend about what 18 15 billions projected to be 16 18 billion this next year and most of that money will go for want on most of it will be for well a lot of it's going to go for storage. Naturally that's one of the big ones. But a lot of it's going to go for deficiency payment systems all low in Minnesota alone we're going to we're going to be collecting back from one thousand eighty eight. About 80 million dollars in efficiency payments that were paid it will be collecting back from pharmacies here simply because the price went up and the deficiency was not earned. Also with a disaster bill anything that you got disaster payment on. You have to pay back that deficiency. Will us anything to add to that. Well there's certainly a lot of concern on the part of farmers around the country that now are going to be faced with a billing from the federal government and have to

pay that back and there is an attempt in the Congress to try to get a forgiveness on that I'm not too optimistic I don't think at the present time that's going to happen but there are certainly going to be farmers that are going to be I think surprised by the fact that they're going to get this billing and they're going to have to issue a check back we don't get a change. Let's go to the telephone and see what's on the listener's mind right now you're listening to Will AC can and Don Frederick talking about the agricultural economy in Minnesota and in the Midwest and go ahead we're listening for your question. Hello. Hello hello. I'm interested in this crop insurance that was brought up a couple of questions. What does it cost farmers how is it priced. What does it cover and whether or not the taxpayers subsidize it. I'll try to answer that I. We do not sell crop insurance through our agency that so sold strictly through the federal crop insurance corporation basically and I can talk only Minnesota but by and large Minnesota

just about anything you raise not everything but almost any commodity that you raised can be covered by crop insurance. It is subsidized by the taxpayers. I believe to the will if you want to help me I'll believe it's about 30 percent subsidy I believe that the taxpayers subsidize that. You can buy that and different. At different levels. For instance on corn I think you can buy it. Again I'm just projecting because I'm not quite that for mother with it but I believe you can buy it at a $2 now lowered you can insure yourself for $2 a bushel you can sure sell for maybe two dollars and sixty cents a bushel. I don't know if there's two or three levels but for sure there's two levels. All right we have another caller on the line and let's go to that question. Go ahead please we're listening to what is going on. Coming too else to. The mind the free market

commodity we have to deal in the free market. Nobody guarantees him a price like his old customers get away is the health of the free enterprise. Remember disco. Thank you very much. Well I guess I can answer lies never discussed alfalfa usually used as a hay crop a forage crop for livestock and so it's an internal market to a farmer to farmer market where it is sold by a farmer that might have access hay or might be in a business or raising hay for sale and is sold to another farmer they put it through their livestock and so it's a value added component in that livestock farmers business and. I guess that may be why it isn't talked about in terms of federal programs in that it really is kind of a farmer to Farmer commodity.

All right. Our guests are WILLACY Can and Don Frederick talking about the agricultural economy in Minnesota at about 20 minutes past the hour and will give out the telephone number that you can call us in the Twin Cities. It is to 270 six thousand two to seven 6000. And you can also call in toll free no charge for this call if you live within Minnesota outside the Twin Cities area. 1 800 6 5 to ninety seven hundred one eight hundred sixty five to ninety seven hundred. The media paid some attention to this issue when the agricultural depression was hitting hardest and that was that farmers were starting to cut down on chemical applications. They were starting to make some fewer passes over the field with their equipment all in an effort to conserve try to cut back a little bit that a trend I assume has continued. And what's what's the status Don Willis is that the new mode for farming these days. Dan I think it's going to be I think most farmers by and large are good conservationists. Water is going to be the topic of the niece. There's no question about it. And I think farmers

are looking at that chemical companies are looking at that the use of chemicals. I farmed and we didn't have chemicals but I'd hate to go back to that level any more I don't think you could hardly farm today I guess you can but it's much more costly to farm without it. But I do think we have to take a look and yes we're seeing farmers no simply because the economics of it. Farming is not a high profit business so the farmer has got to look at at the economy of it and put on the right chemical at the right time to try and keep his costs down. Well as I have the impression that the majority of farmers in Minnesota still do not see themselves participating in direct farmer to consumer arrangements the farmer's market concept is viable apparently only for truck farming fairly small scale farming so the attempt by some of the cooperated and some of the more direct farmer to consumer efforts apparently is still

way to bloom. Well that's correct and we find a trendline rather disturbing as to what's happening in the in the concentration of power if you will of the larger corporations into the food markets and into the food processing structure we're seeing. That concentration take place we just saw it recently in Minnesota with the sale of Pillsbury to a foreign owned company that now is a multinational country company that is involved in the food chain to a very high degree and we see it in the livestock industry where we have three large corporations that have moved very aggressively not about 71 percent of the processing facilities in the United States and so we think with that kind of large concentration control it's very very difficult for farmers any human farmer cooperatives to get into the full market structure and to be a more direct conduit between both producer and consumer. Let's go back to the telephone for more listener questions who are listening for you go ahead.

Good afternoon. I have a quick. And for both of us I grew up in southern Minnesota going to school up here in the city now and I'd just be interested in hearing your views sort of in a you know in a broader framework of what direction you think this next federal farm bill is going to take. That's going to be an interesting debate I think that's going to take place over the next year. In fact the Congressional committees are have now set up a hearing scheduled around the country where they're going out to solicit citizen views on what should be in the next farm bill. I think we have maybe three basic approaches that will be debated one is a continuation of the with some moderate modification of the 1985 farm program the one we now are operating under. Another will be the decoupling proposal which is part of the U.S. position ADAT that has been put forth by Senator Baucus which from Minnesota and that would in any sense decouple or take away the payment from the from the products we raise be more of a

direct income maintenance program and then a third approach gets into what you might call a two price teared system where you have a price for domestic consumption or domestically raised commodities as opposed to those that are in the export market and so I think those will kind of be the three sort of alternatives that are going to be part of that dialogue where they'll come down. I think it'll depend. The weather circumstance the gap discussions a number of things. Let's go back to the telephone for another question it's your turn go ahead. Good afternoon I have two slightly unrelated questions but it was mentioned in the report that we did not do very well this year and what part of the United States grows what if we don't is that true. The first question and the second question is is it generally true that the farther north you go in the state the better the rainfall situation was last year and the spring holding up. Thank you. Well when we do is growing primarily in

basically in the central party united states Kansas Nebraska Texas Oklahoma down in that part of the country Minnesota we don't have a lot of winter wheat. I think in Minnesota we have our ROE and no on pulling us out of the air but I believe around 300000 acres roughly would be the most when are we. It's grown not true as far as the rainfall this past year in a north country we travel 73 colonies this past year. And when you got up on the Canadian border up in new kits and county area in that area they were hit rather hard very devastating quite frankly in Kitson County as far as as we paid out around 12 and a half million dollars in disaster payments in Kitson County alone. So. Your statement as a rain issue further north you went to rain got better did not hold true in 1908. Back to the telephone for another listener question and it's your turn go ahead.

Yes I wanted to ask about the up and West Point Coney Island is someone a person who does financial planning for farmers up there said they had gotten like three bushels per acre a week and the University of Minnesota and North Dakota they put out because the last two years ago they had leadership beets or barley or some flowers kind of thing. It's just a sickle reporting we'll be putting that out I don't know what the university does on that. WILLIS You might know but statistical reporting which offices down in the state department of agriculture building they will be putting out a report as to what deals were across the state. I think I think the university does rely on the statistical reporting service that runs and the information they have available. But most farmers bother to harvest three bushels of wheat per acre. No you wouldn't believe that in that case if they especially if they had multiple crop insurance so they would have been totaled out with that kind of a low yield.

You know is drought insurance going to be sold or multi-paragraph insurance going to be sold by a Chub or any of the other companies this year in Minnesota as far as you know I don't know if Chuck is going to be back offering insurance there because of the problems they had a year ago but certainly the Malta Pearl and the federal crop insurance is going to be I think like to be a growing use of that. Without insurance protection by farmers based upon their experiences of 1088 Dan it was mandated. If you had a 65 percent loss in you applied for the deceased or payment you had to buy federal crop insurance on that crop that you were paid disaster on. Let's go back to the telephone for more listeners and it's your turn Go ahead please. Question for Mr. Frederick a farmer signed up on the corn program and has a bad stamp for 2050 because of the drought or whatever. How much soda can you still call when you get a privateer agent. Ever have the field appraised and plowed up. What is your IQ. Possible.

No not by July 15th you've got to have your crop in you will have to certified by jet by July 15th. Right Simple question simple answer or at least straightforward question straightforward answer. Now back to the telephone for another one hello. We're listening for you. If you're in the areas of the irrigation area. Air reservoirs of the country have no more than normal rainfall. Will there be a meaningful under normal production of the wheat and feed rates. I'm not real comfortable answering what the reservoirs or the ability of irrigation water is my understanding is that in the state of California and some of the western states they do have some real shortages of water in the reservoirs. But those areas of the country really don't get into the wheat production as much as they do other crops and so I can't in that area I don't think there's going to be has all that much irrigation of rescues Watergate and I think that's more into the corn and the soybeans

that's a little higher valued crops and my understanding is Nebraska that's mostly underground irrigation and so I think the reserves are more in the western states and. Outside of California I really don't have a feel or any indication of what their reserves are. We're about halfway through our conversation with WILLACY Can the president of the Minnesota farmers union and Don Frederick the state executive director of the C.S. the agricultural stabilization and Conservation Service and taking your questions by telephone if you'd like to place a question to either of our guests. We have several lines open in the Twin Cities now at two to seven six thousand two to seven 6000 on the issue of the state's water resources it appears that the trend towards center pivot irrigation and other kinds of irrigation systems has grown fairly dramatically over the past 10 years Willis is that so and is the trend continuing and is that really starting to pull down groundwater supplies. Well I think there is a growing trend to do now with a new

modern technology we have it with arrogation to put in more irrigation systems especially again when you go through a drought year. But there also I think is a growing concern about being able to monitor what this drawdown is going to mean in terms of underground water supply. And as Don mentioned growing concern about contamination of ground waters and the use of chemicals in some of those areas that are very sandy where it has a chance to leach down into if you young water through arrogation So there's a lot of factors that may be part of that will be part of some dialogue as you look to the future in terms of this trend of growing irrigation. Don is a farmer in southeastern Minnesota Do you welcome what seems to be the fairly heavy hand of the federal government here getting involved in. Well soil erosion detection for example where if I'm not mistaken by the next decade farmers will really have to tow the line on monitoring soil erosion for the government in order to participate in the program. Well.

I do and Dorset happens to be you know there's a lot of this highly eroded the land that got farmed through economics. Prices got pretty good then prices went down and farmers want to get more production up to maintain their their status quo on their income so they were farming more acres to try and have that keep that even. We did get a lot of land into production that ought not to been in production so this CERP program we've got going No I think is going to be a good program. It's ironic I farm some land that I took out of the old soul bank program for a landlord knowing putting her land back into the CERP program again so what goes around comes around. But yeah I think it's a good program. This involves as I understand it even placing sensors on some farmland so that the government can determine really minute amounts of soil erosion is not right. Well I've read something on that I'm not familiar with that at all dam. It just struck me as a very intrusive way farmers being an independent lot by nature it seems to me although I must say Willis and Don are getting along famously here for the

purpose of this broadcast here during the noon hour but an independent lot it seems to me in here with each passing year the federal government is adding on another layer of watchfulness. Just watching to see what's going on on the farm with us. Well there's. No doubt the environmental concerns are going to continue to grow and we as individual farmers are going to have to adjust to some of the realities that are going to come whether it be the federal government state government or whatever in terms of some of the restrictions that might come forth and I think as we look to some of the concerns we have an environment I think we all have some reasons to share something CRN we will hear about the ozone layer and then the things that are changing there in terms of the potential for temperature adjustments we hear about some of the impact of pollution into the air and what it does for the weather patterns in terms of rainfall and a lot of speculation is last year whether or not that was having some impact on the drought here and in Minnesota and in the Midwest and so whether we like it as

individual farmers or not I think reality dictates we're going to have to be more cognizant of the environment and the pressures there. Let's go back to the telephone for another question for our guests were listening for you there. Yes you're on. OK. I want government to know that that's becoming president. Now one of the things that's a common question that you had on the report for the Minnesota but you answered your question but I thought you didn't say please think about temperament. He had a lot of great laughs Probably very adequate. We had so much snow we couldn't shovel it off and we got a lot of moisture up here at North Central Minnesota and it Forster I don't care. All right well we've been set straight on that. Very good thanks for calling in from County and now on this issue of the conservation efforts that you were talking about. RIM reinvest in Minnesota and I've been reading correctly that the death knell is going to be sounded for Rimmer What's the outlook there. Until the legislature is adjourned I don't think any of us really know what

the end result will be. But I think it again it was in that part on the part of the state to become involved in the soil conservation and land use issues and. I guess we supported it when the legislation came through as an organization would like to see it continue. On the matter of the ability of farmers in the United States to cooperate and get along and lobby for their own interests are the farm lobbies in other countries of the world simply stronger than the farm lobby in this country and. And why is that. I believe they are in certain countries. Again it just changes country by country but if you take the European community for example I think that they have a much stronger voices. As farm organizations within the community then what we do here in the United States. If you look at New Zealand New Zealand exports primarily to commodities dairy products dairy products they have a farmer control to a cooperative marketing structure that markets 100 percent of the dairy

products that are sold in international trade in the beef primarily mutton. They again have about 60 percent of the control of what goes into the marketplace and so you've got a wide variation around the world but my feeling is that in the United States one of the problems we've had here is that we have such a diverse. Number of organizations going to Washington representing farm interests that will lose a lot of our unanimity and common purpose. Don and WILLIS Do you see the sort of factory farming trend continuing in this country that's a term that's been coined by some folks as they look at the dairy and poultry operations in states such as Florida and California which have sprung up over the past couple of decades. Is that a trend that we're going to see continuing because of the cost efficiencies. I think we are. We're concerned about that. We're seeing it happen now in the 80s I think partly because of the 1995 farm program in that. Because of the target price and the lowering of the loan rate which the loan

rate really set the market price up until the 1900 drought hit it was cheaper for large feedlots and conglomerates to buy the feed and put it into their livestock operations that it was for the farmer to raise the feed put it into their own livestock on their own farm and so the trend line of the future I think is going to be dictated partly by the Feis of that feed grains and if we see the market and the farm program allow for a decent price to the farmer in the feed range area that enhances the ability of that individual entrepreneur farmer to have the value out of concept work for them. We have a very low price and you can buy it cheaper and you can raise it. That's going to just. I think so. Put more pressure on not glamour coming in and taking over a lot of the livestock. Part of the farm industry. I think you'll see more of it in the poultry than you will a life stock and less not forget that. Probably only about 3 percent of our farmers today are still the large conglomerate operation it's not a it's not a big

percentage across the country but they raise significantly larger more Senate. That's true but what if you if you you watch that you'll find a majority of those people are in just what Willis was saying there are more in the processing in some Amarna growing in. But you're not seeing a lot of corporations if you will getting into the farming in the victim sales. So in Minnesota for example you still see the family unit the family sized farm unit as still basically the enterprise IT will see for the next decade or so. I think so I think we're safe in saying that Dan.. We deal with about 92000 farmers in the A C S in Minnesota. And farms have gotten larger. I'll be the first to admit that. But you were still up too. I believe the average size farm in the soda in the hole is something around 400 acres I'm not sure that's the correct number but it's in that in that ballpark. One of the real concerns we have is the movement towards contract farming. And this is a way of interpreting the system. And you know we've got it now in the poultry

industry. That's a highly integrated system you can't really raise poultry in this state unless you have a market contract with somebody that is going to buy your poultry before you put them into the house. We're seeing an aggressive movement now into hawg area where we're seeing hotels as you call it starting to be put up where again is under contract. And what what that does is restrict the opportunity for individual farmers out there to have access to the market. You know you're under contract to somebody is willing to buy it or you don't have a market to sell and that that's a dangerous trend of the future I think. Well there are some more questions in that vein we should cover but for the moment let's get to the telephone here what's on listeners minds hello you're here the next questioner. I would like the pharmacy representative to comment on the bovine growth hormone issue and I wonder how much you're going to support EU legislation to ban the chemical. You're talking about the new area the use of the hormone in a dairy

production. So amend Yes at the state level our delegates at our last convention had a policy statement that was debated at our convention seeking a band on this product to be used in the marketplace here in Minnesota. So we've been supporting that legislation here in the state legislature. It does not appear like it's going to pass this year in the state but we have been supporting it will us again for a city people this is a substance a laboratory created substance bovine growth hormone that can be given to dairy cattle in the IDF I understand as you can give it to dairy cattle they'll produce more milk so you can actually reduce your herd size. That's correct it's supposed to improve the production efficiency of the individual cow and produce more milk. So it's a good idea why ban it. Well we are concerned about the impact that that might have in the marketplace in fact we got some information from up in Canada where they have put this mill into the marketplace and there's been a public reaction up there in that was in the British province of British Columbia where the concern on the part of consumers. And this product is

still under research in review and we just think it's a dangerous precedent to get that into the marketplace with all the concerns that consumers have no rightly or wrongly about the impact of chemicals in the foods we eat and we're just suggesting that until we know more about it. Let's not get into the marketplace with a product let's wait and make sure it's evaluated properly so we know what we're doing. Livestock producers have gone through this same debate over the years with various substances. D.S. Is that right Don that's a little strong. That's right. And that debate has been settled. Has it not. Yes. If you can explain the debate and what happened to it. Well you know it's pretty well been abolished as far as the best rules concerning law. There are still some some implants and still controversial that are being used. But for the most part fact it's best for all has been abolished so it is not being used anymore. All right back to the telephone for another question or it's your turn go ahead.

OK. Yeah I'm calling about the. One of the one of the moderators mentioned the fact that you know control of you know all of our photo you know running to the big corporations. But I think one of the things that I have. Over my lifetime and they can comment on this is that the small town slaughterhouse has been eliminated and its been eliminated largely by the state of Minnesota by the stringent stainless steel regulations and sanitation regulations that they put in and they forced these people just you know one day to come in and they say well this is the way it's got to be in and a week later they're in their plant and they're saying well now it's got to be better. And all of a sudden they can't afford to upgrade anymore and they close and we've lost a lot of. I live in south southeastern Minnesota and just about every little town used to have a. Larger facility of some kind either for chicken.

Or have for other heavy livestock. There's very few of them. All right let's get a response from Don Willis. I think I agree with you but I think also a lot of that has came about through federal regs not only state regs federal regs have gotten involved. I used to market my beef cattle for instance to a local locker. They had to have because of that he was selling it back out he had to meet federal regs and I think some of the federal regs have gotten to the point where the small operator in those slaughterhouses could not afford to put in the facilities that were requested. I don't know about the state wells may know more about what what state rules and regs done but I think in the one I'm from earlier with federal regs really get in there and really cause the locker plant to. Have a large investment in order to keep his business state really got just in force mid-end of the federal regulations really was federal

regulations that moved in and cause these kinds of difficulties with the state then being the enforcement agency for returning to a moment for discussion about the direction of the Minnesota agricultural economy and its part in the global farm economy. Where are the new farmers going to come from Minnesota. Somebody has told me that the average age of Minnesota farmers is something like 50 53 years old in Minnesota getting closer to retirement. What is it like trying to become a new farmer these days in Minnesota Willis. Very very difficult. Partly because it's hard to find the financing to get young farmers into the business. You know and in our own family I go back to my dad and my mom. Being able to buy their first farm right following the depression through the Farmers Home Administration program we saw back then and a very aggressive effort on the part of the federal government to provide credit and make credit available so that farmers could get back to farming could get back on the land. We feel that

we need to have some of these programs again and we'd like to see a redirection of the Farmers Home Administration if you would to again get very aggressive in his area of providing some meaningful credit programs to young farmers that want to make a lifetime on a farm and give them the opportunity to get into farming. But we have the state you're in tee'd Family Farm Security Act private lenders could loan money credit to young farmers and the state would guarantee the loan amount but that went under with the agricultural depression that had closed down Don is that the answer to reinstitute then. I don't think so Dan. I think what you're seeing now when you when you talk to the young farmers talk to consolers what they're telling you now I know what it is. Back when Willis and I were in the legislature thing to do then was to buy land. Everybody thought they had to own land. Now you're finding that the recommendation is to rent land and you're finding a lot of these young lads that are starting to farm out now are renting land in with the idea of not having to own a lot or a

large amount of acres a lot of money by maybe a hundred sixty or 240 and then go from there. I think that's what you're going to see happen in the in the next. If you will 10 years maybe even 20 years I think you're going to see a lot of these young farmers are going to be running from some of us old offers and not owning that land. WILLIS We have a I have a personal concern about about that direction if we get 10 carry it too far in that. Again it depends on who owns the land that you're renting and you know traditionally in Minnesota and I suspect in most of the states around the country we have gone through a period where we had neighbor to neighbor kind of associations or relative to relative almost Association sometimes in our rental arrangements. What we're seeing now happen more and more is is the outside investors coming in and buying this farmland. And and then you're going to have farm management companies and they're sitting across the table negotiating land rentals and I can tell you as a farmer that's farmed for a good number of years. If you have a one or two year land

rental contract you're going to the banker and want to buy yourself a tractor. They get a little nervous. They like to see something a little longer term a little more stable than that. And so you know they can talk all they want to about this. This movement towards just renting your land but there's a certain element of instability in that as well in terms of the long term ability to have a base. Do the two of you agree this is one of the more dramatic trends you're seeing in the change of farming that you have observed over your time in farming this idea of the manager versus the renter farmer. Bill question no question that's a dramatic change from what we've seen because the older farmers are turning over their land and they're hiring managers to rent out the property or a farmer's tenant farmers. And they're not that's a hired agent. It's a professional that takes a cut off the top of the spread in terms of that land rental. Many of us grew up with the phrase the breadbasket of the world in reference to either parts of Minnesota or all of Minnesota depending on which little parochial interest was speaking about which part of Minnesota they were from. Now with the rise of agriculture around the world the

Green Revolution and other aspects. Is it still safe to say that the Midwest is still the bread basket of the world in terms of what it produces. Well I think so I think that you know we have traditionally had a combination of good soils and favorable weather that have allowed the farmers in this country to be really dominant in this cultural production globally and if you look at our export sales we run about 35 percent of the total export sales globally. Corn were not 50 percent. I think soybeans around 60 70 percent. I think that tells you something about our capacity capacity to produce about what we need domestically and to supply the food for the world so I'd still consider us the bread basket down there's no question we are we are divided in the CSA were divided by five areas in the United States the Midwest area which were in is eight states we go as far out as Michigan we go down to Missouri. And you know we get Indiana Illinois Iowa Wisconsin Ohio

who else if I forgot Indiana Minnesota. If you look at when we go nationally to national meetings. Those eight states is where the action is as far as crop production and is concerned. In the United States other than wheat wheat we've just begun this plant in Minnesota wheat is a big crop for us. But other than wheat you take feed grains you talk in the corn. This is where it sets right strictly in I'm in the middle of America. Do the rising does the rising ability of other countries to produce their own food supply. China India Bangladesh other countries. Is this going to really impact on Minnesota farmers in the next 10 years and we've had some drought problems in some parts of those countries as well so it plays both way I suppose but will we see an expansion or a reduction in the farm export market. Well I think you know there's so many factors that that enter into those assumptions. There is a element of food security that as a concerned individual

nations say there is a movement to try to have some self-sufficiency in terms of food because it is such a basic commodity that they need for their people. We believe that that the prices the farmers receive are going to have as much to do with the future of what that market potential might be as anything in that if you don't have money to buy you are not in the market place and even though you have a need for people to eat if you can't afford to buy it you can't people just go hungry and we see that happening throughout a third world countries. And so our organization is supporting the need for food being created unique establish a minimum price not international trade that assures some level of profitability back to farmers. If you raise the profitability of those third world countries where maybe 80 percent of the people live in rural communities are on the farm they're going to become a buyer in the marketplace and that's the best way to enhance our export market in future. I think there are at least a couple of measures moving through the Minnesota legislature this session if I'm

not mistaken speaking to drought relief for Minnesota farmers there are various features including grants of money to farmers that might experience drought grants to help put in a new well if their will goes dry or help replenish a crop. Is this good public policy in your opinion to craft these drought relief packages with the prospect that taxpayers might have to pay out a fair amount of money. DUNN Well first of all I tended to hearings at the Capitol last week. I don't think that drouth package is probably even going to get funded this time around. I happen to be one of those people who doesn't think it probably ought to get funded. I suggested that to the legislature back in January because of the drought package that the federal government had. We had most by for the most part we had just about everything in that disaster package that they're looking at up there artists Aster was not as severe in Minnesota as was first anticipated. My figures just given to me this

morning that we paid out about two hundred ninety one million dollars in Minnesota complete for disaster program that's emergency feed in the and the whole thing the emergency feed is still going on so the total figure is not completely and we've projected that early on to be 600 to 800 million that we put out after harvest. We dropped that. Now that is good news for the farmers good news for the consumer quite frankly because our harvest was a little better than what we had anticipated. I don't think the state of Minnesota needs to get into subsidizing some of that. You know that's a that's a debate that has to go on the legislature. That's my personal opinion. I think the federal government has provided an adequate program and whether the state wants to that's up to the legislature. Well is do you agree with Don. Our organization did support the state legislation and there's a couple of areas that we would have liked to have seen some help.

One would like to enhance the federal crop or the multiple crop insurance. This seemed to be the best way for farmers to be able to get coverage and leverage some operating monies for this next year. The legislature because it did not act early in the season were now you're late in terms of getting that assistance into the package and then a reality for farmers but it was one of the areas we pushed early in terms of the state at least participating to try to help pay the cost of that federal crop insurance. Another area that we felt was important was with the alfalfa one of the questioners in the program today talked about Alfalfa. This was a crop that for farmers that need hay for their own livestock or if you're in the business of selling hay found yourselves a year ago with new seedings maybe that didn't catch their khat was almost a two year lag time if you will they've got to go out and plant this year and so we felt there that a federal

program didn't address that and this was an area where the state could have moved in and provided some assistance. Looking back for just a moment as Monday morning quarterbacks to the state sponsored mediation program for farmers that were in financial trouble during the Agricultural Depression did that program save a satisfactory number of farmers in your opinion with us. My guess is always hard to determine satisfactory number but I think it did have an impact in saving a number of farmers in the state and. We're really proud as an organization that we were as aggressive as we were in promoting that legislation and getting it passed and our state legislation became a model if you will for the federal government and some of the legislation they passed. And you know it did provide for that third party sitting down and bringing together the lenders and the borrowers and working through the problems that they had as individuals with their financial situation and we found that because we had that mediation program in place here in Minnesota when we came with the federal legislation that just passed this last year we had a mechanism in place where we were

able to provide assistance to the farmers dealing with the farmers whole ministration and the debt restructuring programs they had and so I think it's been a very beneficial program and I think it should continue. Don is it clear to you that this was the way to go and now as you see farmers coming into the A C S offices around the state that indeed farmers are in substantially better condition financially either because of mediation or because of farm prices or do you still see a lot of farmers on the margin. No skidding No Dan we do not see a lot of farmers on the margin. There are some I would say you know we're talking a small percentage even in good times we have about two or three percent. So the farmers we're seeing coming in now quite frankly are in much better shape than we ever thought they were going to be and it's two things. They had a little better crop in 1908 than it was in Tissa pated. They had marketed they done a better job of marketing they had a pretty good price to market on and the dispatcher program the disaster program was

the. Well that was a salvation to quite a few but then the farmer that had the foresight that bought crop insurance on top of the disaster program which about 25 percent of the farmers did in Minnesota they fared pretty well because they were able to collect federal crop insurance and also disaster payments and they had a fair crop to harvest or to market based on what the two of you have pointed out about what the federal government has in place now to respond to the drought and other catastrophes and Will is facing the fact that the state of Minnesota may indeed not have the state sponsored drought relief program. Are we on a much better footing than we were let's say a year two years ago to respond to a drought. Well I don't know I don't know if I'd agree to that statement I've been worried as a farmer in that if we have another pockets of drought that we will not have a federal disaster program like we had a year ago. There were a number of factors. Number one it was an election year and I think it has much to do with what the realities of getting legislation through is

anything to there was money already appropriated that would have gone out and been paid through the deficiency payment program that was there and available and so they didn't have to go for new appropriation they just took some of that money and diverted it into a disaster program and so I think that if we find farmers in certain areas that are caught by the drought this year they better not count on another federal drug program done. I agree with Will us all in all if you know if and I'm sure you know that they're talking about Sastre drought bill in Kansas Nebraska. As it is Minister I'm saying the worst thing could happen to us if we get a drought bill and we have to administer it on a county by county basis now we've got a problem because if you're in one county you can get disaster payments in another county you can't. That could come down to that because I agree with us we've got some pockets where we've got problems. All right we've been listening to our guest Don Frederick the state executive director of the ALCS the agricultural stabilization and Conservation Service and WILLACY Can the president of the Minnesota

farmers union Thanks to both of you gentlemen for coming by today. Thank you thank you. And we invite you to stay with us now throughout the afternoon and evening hours on our Minnesota Public Radio broadcast schedule a reminder that this portion of Monday's midday is made possible by cooperative power providing electricity for 17 member cooperatives serving west central and southern Minnesota. Good afternoon the scary action. Legislators are selecting for new members to the University of Minnesota Board of Regents. The importance of those selections was underscored this past year what with all the turmoil at the university so the process would normally get lots of attention. But this year it's being watched even more closely because there's been an effort to take some of the politics out of the process. We'll have a report on that story in NPR Journal this afternoon we invite you to tune in 5:00 our music stations 5:30 our news stations. Thanks to Bill where I am for handling the telephone traffic for today's call in program. And thanks to Patty Rudolph for technical direction. This is Dan Olson reporting. And this is K S J end 13:30 Minneapolis St. Paul at last report in the Twin

Cities partly sunny Forty nine degrees. A reminder that today's programming is sponsored in part in honor of Wes's wife Marilyn on May basket day. Stay with us now for Associated Press news headlines and then take out with host best friend. Time now is one o'clock. Maybe that's where you are. I'm shocked right. Optimism at Cape Canaveral NASA's space shuttle Atlantis might lift off as early as Thursday now. NASA's technicians who are believed to be meeting at this hour are planning to announce a.