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It is important that producers use collective marketing to achieve a price level that is fair for all involved rather than going it alone and only serving just oneself.
Added May 7, 2009. I operate with my brother, Allan, an organic grain/hay operation near Madison in east central South Dakota. Our operation has been organic since 1976. We grow oats, corn, soybeans, and alfalfa following a six year rotation. We have 180 head cow calf herd that utilizes forage from non-tillable acres, pasture land, and alfalfa crops. All of our grain sales are handled through NFOrganics which is a member of OFARM.
I have great respect for livestock producers, especially those in dairy. Their commitment to the farm on a 24/7 basis is dedication in its truest form. Sensitive to what is happening on dairy farms today; I recognize the price/cost squeeze is real and problematic. I also believe that the solution is a fair pay price which is stable and covers true cost of production. The answer is not to pass on lower prices to the grain/hay producer nor is it to financially short change your farm or place emotional stress on your family.
Within the market place, there is sometimes a difference between what we are able to obtain and what is reasonable (Now, I’m in trouble with my marketing agent!) There is an ethical question here. I first made this comment at a Senate Ag Committee and I will say it again, “Price without principle is like (you know what) in the wind, the end result get’s a little ……” I don’t think it’s proper for a seller to extract the last “drop of blood” in the market nor do I feel it’s the obligation of a producer to take less than his/her cost of production. It is important that producers use collective marketing to achieve a price level that is fair for all involved rather than going it alone and only serving just oneself.
As an organic grain producer, my costs have to involve competing land rents and values. Every farm community knows that large, conventional operators are pushing land costs to unreasonable levels. Organic grain producers must also recoup many other expenses like seed, fuel, parts, machinery, etc. Knowing that forages and grain are moving off the farm and not likely to be followed with adequate amounts of manure left on the farm, grain producers must seek out soil building programs that involve both extra management and crop rotations. Remember organic corn can only come from a particular field only once out every 4, 6, or 8 years not every year like on some conventional farms. Further importance is for a grain producer is to provide some kind of self –insurance by which a certain amount of sales income is set aside to cover years when crop yields swing to the down side.
I hope both grain producers and livestock producers will work as partners and not as competing forces. Our individual success is dependent upon our mutual success as food producing partners.
Madison, South Dakota