Serving the membership of North Dakota Farmers Union as president opens many doors to visit with leaders. I try very hard to communicate the opportunities and challenges that agriculture faces. I tend to be solution-based in my dialogue, as NDFU strives to enhance the wellbeing of family farmers, ranchers and rural communities.
In the conversations I have, I am amazed at the lack of vision and the unwillingness to even communicate options beyond traditional expectations of what can change.
Agriculture faces a number of huge dilemmas. We are very good at production, so we overproduce the market. Logistically, we cannot connect our oversupply of food with starving people. The industries that supply us, buy our products and transport our products are so concentrated and vertically integrated that competition is nonexistent. Each of these issues limits our potential for success as we get paid less for our products and pay more for our supplies.
I write about this today because the other leaders that I visit with seem to think we can solve this challenge by simply producing more products regardless of the price. For example, if we expand animal agriculture in North Dakota, we will add value to our commodities. This may be true, but we are overproducing animal agriculture products already. Dairy farms are going broke in other states because there is too much milk on the market. Beef prices are lower due to extra production and imports. So, does it make sense to add more production knowing it will drive prices down even more? I say we should expand animal agriculture when economics suggest it can be profitable. I also say “value added” only works when the added value ends up in the hands of the farmers and ranchers taking the risk.
When I try to compare food production to other industries, the one difference that continues to show up is the lack of supply management. In the auto industry, manufacturers produce the expected number of cars they plan to sell. They do not store the extra inventory. They offer rebates and move overproduction out before the next year’s new car release. In agriculture, lower food prices do not translate into people adding another meal. A car rebate does generate more people willing to buy a vehicle.
Food is essential to life, so it is different than a desired product. We need a balanced approach to food production. The “open market” will never pay farmers and ranchers for their production at a level that will sustain a farm or ranch when we have massive supplies. We need better farm programs, we need supply management, we need help with logistics to feed the world’s hungry population, we need international reserves, and we need to limit monopolistic practices.
It is time for a real conversation about production agriculture. The old way of simply overproducing the market is unsustainable. Adding additional production to an oversupplied market only leads to lower prices.
– NDFU President Mark Watne