According to estimates from the U.S. Department of Agriculture, Iowa farmers are poised to receive record cash flows in their most recent harvest. A major part of this windfall is high commodity prices. Corn is selling for roughly $6 a bushel and soybeans are selling for about $12 a bushel. Based on these prices, USDA officials believe that the 2011 harvest could reach $20 billion.
Added to these high prices is a thriving livestock industry. Estimates from Iowa’s nearly 100,000 farms anticipate nearly $10 billion from the sale of cows and hogs. Collectively, Iowa farmers could receive roughly $30 billion from the sale of crops and livestock, nearly double their incomes in 2000.
High crop prices are a mixed blessing for Iowa farmers and the rest of the state’s population. High commodity prices mean an increased income for farmers. In addition, a thriving farm sector translates into more jobs for the rest of Iowa and a strengthened state economy. Iowa unemployment rates are currently around 6 percent, significantly lower than the national average of about 9 percent.
However, good times for farmers don’t necessarily translate into sunny days for everyone. Increased crop prices cut into ethanol producer’s profits. In addition, high crop prices mean higher grocery costs for ordinary consumers.
Finally, a thriving agriculture industry can often translate into budget cuts in Washington by politicians who do not realize the precarious nature of farm prices. Many politicians question the need for farm safety nets when commodity prices are so high. However, these same politicians forget that just six years ago, for example, corn sold for less than $3 a bushel.
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Written by: Justin Ellison / Farm Plus Staff Writer