American agriculture is doing just fine

ROBERT SAMUELSON

There is no longer much justification for ag subsidies

MARION, Iowa — Sitting in the cab of a $350,000 John Deere tractor pulling a $150,000 Deere corn planter, Greg Carson embodies modern American agriculture.

It's capital-intensive, high-tech, efficient — and now immensely profitable.

Looking for a bright spot in the U.S. economy? The farm belt is it.

Driven by high grain and soybean prices, farmers' cash income hit a record $109 billion in 2011.

Land values have followed high crop prices. Since 2006, an average acre of Iowa farmland has doubled. Last year, the increase was 33 percent to $6,708, reports Michael Duffy of Iowa State University.

Farms sustain factories. In Cedar Rapids, Cargill makes corn syrup and soybean oil; ADM produces ethanol; Quaker Oats makes cereal.

Iowa's unemployment rate is now 5.2 percent compared with 8.1 percent nationally.

"In the last 30 or 40 years, these are the best times we've seen," says Kirk Weih of Hertz Farm Management, an advisory firm.

American agriculture is the story of unending small changes relentlessly boosting productivity. In 1960, an average acre of planted corn yielded 55 bushels; that's now about 150 bushels.

Behind the increase lie better seeds (including bio-tech seeds that combat corn borer and root worm — two threats to healthy corn), improved use of fertilizer, insecticides and herbicides, better planting techniques and advances in farm machinery.

Consider Carson's tractor.

It's guided by GPS satellites. This makes for straighter and more productive rows.

It also allows for the automatic adjustment of seed flow, depending on fields' different soil types that have been programmed into the computerized controls.

Sandier soils, says Carson, can't handle higher seed rates. Seeds are saved; yields improve.

And the Deere planter now puts in 24 rows of seeds simultaneously; that's up from four or eight a few decades ago.

To cover costs and maximize use of expensive equipment, farmers need to cultivate more land. Encouraging consolidation, this has altered the farm belt's sociology.

Many farm families have left for Des Moines, Chicago and New York — but kept their farms and contracted with the remaining farmers to do the work. Perhaps half of Iowa's acreage is leased by absentee owners, says Weih.

Could the boom go bust?

Well, yes. Agriculture is notoriously cyclical, and people here remember bitterly the 1970s and early 1980s.

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