World's financial troubles affect Carroll corn farmers Crop grows well, but Asian crisis depresses prices

September 21, 1998|By Anne Haddad | Anne Haddad,SUN STAFF

The shelled kernels of field corn flowing into storage bins at Rolling Acres Farm are the color of pure gold, but they aren't even worth what it cost to grow them.

This was supposed to be a recovery year for John Parker Smith and his family, who own Rolling Acres. He and other grain farmers saw their corn stalks shrivel during last year's drought. Smith ended up with no grain to sell and not even enough to feed his own herd of 200 dairy cows.

This year, the corn is growing high and healthy, but the abundant crop is fetching a meager price as a direct result of the Asian financial crisis.

That means another year of putting off needed purchases and repairs under the always looming threat of losing ground. When a bad year hits, farmers cut expenses and hope the next year will cut them a break.

"We, right now, are in survival mode," said Melvin Baile Jr., president of the Maryland Grain Producers Association, and a neighbor of Smith in the Wakefield Valley area of Carroll County. "This isn't to afford the new $100,000 tractor or the $175,000 combine. This is to preserve what we have, and capital spending is the furthest thing from my mind. New pick-up truck? Don't think so."

"The very sad part of this is, this has been the second year that was a bad one for production agriculture," said Lawrence Meeks, another Carroll grain farmer. "When there are two in a row that are bad, you really find out how strong the family is."

For the Smith family, strength comes from three generations working the farm together today, and a heritage that goes back eight generations on their land.

"You put your faith out there with the good Lord with the weather," said Marsha Smith, John Parker Smith's wife. They have seen yields grow and shrink, and prices rise and fall.

"I think it makes you stronger because you know it can't keep up forever," she said. She recalled when she and her husband first bought their own land adjacent to Rolling Acres, and called it Goodwill Farm. "We bought this farm back in '85 and the year after that, we had a drought. It happens all the time."

As fickle as the weather are the global markets that U.S. farmers must contend with. In previous years, one-third of the grain raised by U.S. farmers has been exported, much of it to Asian countries that can't afford to buy as much this year. Baile said U.S. farmers will probably export 1.5 billion bushels of corn this year, about 25 percent less than two years ago.

The resulting surplus is driving down the price that farmers will get for corn, wheat, soybeans and other grain.

"It's the external forces that no one can really put a handle on that are going to affect our bottom line," Baile said.

Meeks, who represents Maryland in the National Corn Growers Association, said he and his counterparts in other states are fTC beginning a grass roots effort to lobby Congress for trade and economic policies that could make it easier for farmers to sell their grain abroad and easier for other countries to afford it.

It costs about $2.50 per bushel to plant and produce the corn, but current prices are at $1.80 a bushel, according to the U.S. Department of Agriculture. That compares with $2.45 per bushel last year.

A farmer harvesting 50,000 bushels of corn this year would lose ** $35,000, although federal programs can make up for some of that.

Last year's drought crippled Smith's corn stalks -- many of them never produced an ear, and his harvest yielded 38 bushels per acre, compared with 160 bushels an acre in 1996.

"So what we have to do this year is cut expenses, maintain our production, and I was hoping this crop of corn we were getting ready to harvest would put us back in the black," Smith said.

"Today, with the low price of grain, it's going to be a real challenge to even break even with 1998's crop. Hopefully, prices will recover," he said.

Smith had some of the 1996 harvest stored dry in a bin, and used that to be able to keep feeding his cows through the spring and summer. He planted short-season corn in April so that it would mature by late August, when the 1996 corn ran out. That kept him from having to buy feed.

Smith and his sons and father are harvesting that corn now. Any day this week, they'll be combing the fields. Some corn plants will be shelled to produce just the grain, which is stored in the low bins. Other corn fields will be chopped up -- ear and stalk together -- to make silage to fill the three 10-story silos that tower over the yellow house and outbuildings.

And all around the grounds, flecks of corn dust dance around the tractors and dump trucks while the equipment hums and the golden grain is pumped into storage.

Smith plans to apply for federal programs that provide loans or direct payments if the low prices persist until his harvest is complete in November.

"I can't afford not to," he said. These programs make up for some of the loss, but are based on formulas that are still below the cost of production, Smith said.

"We're doing everything we can to survive," he said. "Your farm needs to grow on an annual basis, like a business needs to grow. But there's no growth money.

"You're setting yourself up for a big hit," he said. "All farmers will be setting themselves up for a big hit in machinery, and if prices don't recover, we won't be there in the future."

Pub Date: 9/21/98

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