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Touch the Soil News #382

Every month, the USDA puts out numbers on what grain farmers – around the world – are going to produce for the current farming season. Remember that grains (corn, wheat, rice, etc.) are the backbone of the world’s diets both for human food and livestock feed.

The USDA numbers quickly become the fodder for speculators – gambling on which way the price of commodities will go. Unfortunately – these financial gambling mechanisms – often drive the prices farmers receive artificially above or below what would happen without speculative pressures. These gambling mechanisms operate in disregard to the almost 1 billion starving people and hundreds of millions of farmers around the globe.

Depending upon what these number show, farmers are either bankrupted (because they are producing too much which calls for financial punishment) or people starve, (because farmers aren’t producing enough and starving people are faced with food they can’t adequately afford).

Over the past three years, financial punishment of farmers has reached all-time highs in term of major collapses in farm income.

Here are the facts:

1) In 2013, the last good year for farmers, the USDA reported that U.S. Farm Income was $123.3 billion

2) In 2014, the USDA reported that globally, farmers were producing 7.9 percent more grains (corn, wheat and rice) on a per capita basis than in 2013. For this crime, American farmers experienced a Net Farm Income decline of 26.6 percent down to $90.5 billion.

3) In 2015, the USDA reported that globally, farmers were producing 8.2 percent more grains (corn, wheat and rice) on a per capita basis than in 2013. For this crime, American farmers experienced a Net Farm Income decline from 2013 of 54 percent down to $56.4 billion.

4) For the 2016 farming year underway, the USDA reports that globally, it expects farmers to produce 5 percent more grains (corn, wheat and rice) on a per capita basis than in 2013. For this crime, American farmers are expected to experience a Net Farm Income decline from 2013 of 55.6 percent down to $54.8 billion.

Farm auctions are just one of the ways that collapsing income affects farmers. Today, large corporate farms face liquidation as do smaller operations. This photo is the equipment of a 20,000 acre enterprise as it is lined up for auction.

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Practically speaking, farmers cannot just stop producing in mid-stream. They have to keep farming their maximum potential in order to feed themselves and pay back enormous amounts of debt for land, equipment and operating? For perspective, if an employee produces above and beyond the call of duty – is the mode of reward to penalize them with a 50 percent cut in pay?

The USDA numbers quickly become the fodder for speculators – gambling on which way the price of commodities will go. Unfortunately – these financial gambling mechanisms – often drive the prices farmers receive artificially above or below what would happen without speculative pressures . These gambling mechanisms operate in disregard to the almost 1 billion starving people and hundreds of millions of farmers around the globe.

These gambling mechanisms have been a driving force in putting 70 percent of American farmers out of business since the peak farm year in 1935. And the problem affects all nations. Recently, the nation of Spain has reported that over the last 10 years, 25 percent of farmers have been put out of business.

Following is a short video clip illustrates the economic woes of farm crops below the cost of production:

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