I am writing concerning the articles in Farm World regarding the corn checkoff in Indiana.
After talking to several farmers and a few legislators it seems that there are very few people who have real knowledge about the corn checkoff.
One of the arguments made for the checkoff – is that since other states have one so should Indiana. Just because my neighbor has a Cadillac doesn’t mean I am going to go out and purchase one too. If that is one of the arguments for initiating a checkoff in Indiana, maybe we should take another look at the situation.
Five years ago when I was in Owatonna, Minn., I noticed in their local newspaper that the September corn price was $1.63. At that time, our local Indiana price was $1.99. It is interesting to note that Minnesota has had a corn checkoff since 1990. If that is what a checkoff has done for them, then my belief is that Indiana does not need a checkoff.
Traditionally, Illinois, Iowa, Minnesota and Nebraska have received much lower cash prices for corn than Indiana farmers. When big businesses are looking to relocate or build new, they look for a location with cheap inputs, or a place where they can sell their end product for more.
With cheaper inputs, it is obvious why there are a bigger number of ethanol plants in Illinois, Iowa, Minnesota and Nebraska.
According to an article in Indiana Prairie Farmer titled, “How other Midwest state checkoffs stack up,” Illinois, Iowa, Minnesota and Nebraska take in approximately $20 million per year. That means that the checkoff has collected $120 million since the turn of the century or a cool $180 million since 1997. If those states have not done anything significantly price wise with that amount of money why would Indiana think another $3 million per year would make a difference. Since 1997, the Chicago price for corn has been under $2.40 over half of the time and the price has been under $3.00, 98 percent of the time. In the real world, supply and demand determines the price of any commodity.
Matt Gibson of the National Corn Growers Association (NCGA) said in an article that he wished that Indiana farmers would be open-minded about the checkoff. I guess that being open-minded is a one-way street. If he and others pushing for the mandatory checkoff were open-minded, they would tell the legislators to let the farmers vote on the checkoff in January and February of 2008. At this point, that does not appear to be the case as Gibson and others prefer to shove it down our throats and hope we don’t file for a refund.
If they were really interested in farmers and wanted to be open-minded, they would push for a provision in which you, the farmer could sign a piece of paper at the elevator to opt-out of the checkoff. If the farmer did not ask for and sign an opt-out provision, then he/she is automatically entered in the checkoff program.
At one time, I was told by a legislator that he was genuinely interested in what Indiana farmers wanted, but he would probably be afraid to vote against the checkoff. The Farm Bureau, National Corn Growers Assoc. (NCGA) and other lobbyist groups would label him as being against the best interests of the Indiana farmer. To me, this just looks like legalized blackmail.
We now have a federal government that says we can no longer use MTBe (methyl tertiary-butyl ether) and is committed to promoting the U.S. ethanol industry. This commitment has driven corn demand through the roof and a price nearly $4.00 per bushel. Corn futures remain in the $4.00 range because the market is not sure farmers can even meet the current demand for ethanol. So my question is – why waste $3 million of farmers’ money now.
In summary, all the millions of dollars that other states have collected for the checkoff did not bring permanent or even measurable higher prices or any obvious change in the price of corn. For once, the NCGA, Farm Bureau and others in favor of a checkoff should do the right thing and tell the legislators to let farmers decide their own fate and let them vote yes or no on the checkoff.
This farm news was published in the March 21, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.