acreage living January 1999

ISU cooperative extension

In this issue: acreage living home page

How Many Iowa Commercial Farm Businesses Will Survive Until 2000?

Tim Eggersby Tim Eggers, ISU Extension Field Specialist/Farm Management, Page County
Phone: 712-542-5171 - e-mail:

This is the third article in a series on the current farm economy. This article was adapted from a paper by the same name prepared by Robert W. Jolly and Alan Vontalge, Department of Economics, Iowa State University. You can access a full 44 page version of this paper at the Farm Economy website.

For most Iowa farmers the euphoria of 1996 has been replaced with the gloom of 1998. The prospect of rising farm incomes buoyed by expanding export markets, innovative technological developments, and market-oriented farm and trade policies seemed almost a sure bet a year or so ago. Farmers understood that increased income volatility and lower safety nets would require that greater attention be paid to managing risk. But trading increased income for increased risk exposure seemed to many like a reasonable bargain particularly in view of the fact that agriculture's dwindling political clout could not maintain a generous subsidy program for farmers.

But nobody said it would be like this, did they? With prices for corn, soybeans, cattle, and hogs all down 15 to 30 percent from 1997 levels, many farmers are questioning whether they were simply dealt a bad hand in 1998 or if they are playing a game they can't win.

Figure 2 illustrates the percentage distributions of operators and liabilities by 1997 financial status, and figure 9 illustrates the same information using 1998 prices and 1997 operations information. These tables were generated using Iowa Farm Business Association data. A more thorough analysis of the expected impacts is in the paper that this article was adapted from. An increased proportion of producers in the financially week or severe categories has real and negative implications for members of the rural economy.

The underlying causes for the current downturn are largely economic global production expansion has occurred at a pace that exceeded expected shifts in demand. This situation has worsened considerably due to Asian and Russian economic woes. The consequence is sharply lower prices for all commodities. In certain areas, poor weather conditions have exacerbated financial problems. Most Iowa farmers, however, harvested a normal crop in 1998.

Along with the economic fundamentals, farmers are questioning the suitability of the Freedom-to-Farm Program in this new environment. Ostensibly the transition payments were intended to ease the shift from the old feed grain program apparatus to an economic environment without price and production interventions. The underlying assumption for the FAIR Act was that U.S. agriculture faced a future of expanding opportunities - that farming would be, on average, a profitable business. And that with proper risk management instruments and skills, farmers expected they could earn adequate rates of return without the traditional price supports.

But suppose that the low prices persist? Suppose that prices for hogs reflect the long run cost structure of large-scale integrators? Or that corn and soybean prices reflect the cost structure of the largest and most efficient cash grain operations? Under this scenario, surviving farm operations must be able to achieve unit production costs and quality standards competitive with the large-scale industry leaders. Expanding demand cannot be expected to provide any headroom for higher-cost farm businesses.

If this situation plays out, then there is another important transition implicit in Freedom-to-Farm - a rapid exit of farm operations unable to compete at low commodity price levels without direct subsidization from the government. Note that this transition is driven by increasing efficiency due to new technology and organizational innovation. It is not a "farm crisis" driven by excessive debt and crashing asset values. If this transition continues, production agriculture in the U.S. will be more efficient and probably larger scale and more integrated than today. This is a positive development for food consumers and certainly strengthens our competitive position in export markets. But this transition also carries with it the inevitability of farm business failure and broken dreams. The human cost of the transition on farm families and rural communities needs to be carefully considered.

We will face the next two years or so with a great deal of uncertainty. One of the most critical issues is duration how long will low commodity prices persist? A one-year downturn is one thing. Three to five years of low prices is quite another. Most farmers and financial institutions can adapt to a short, albeit significant, drop in income. However, the transition to a period of sharply lower long term prices will require major changes to the structure of production agriculture and rural communities.

Visit for information on current farm economics.

Figure 2 and Figure 9

Percentage Distributions, Operators & Liabilities by 1997 and 1998 Financial Status


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Pat Andersonby Pat Anderson, ISU Extension Field Specialist/Food & Nutrition, East Pottawattamie County.
Phone: 712-482-6449 - e-mail:

1999 Resolution: Increase my calcium intake to prevent osteoporosis, and to help lower my blood pressure and risk for colon cancer.

If you are female and looking for a health resolution for the new year, increasing your calcium intake might provide health benefits for you. Most adult women and teenage girls in the U.S. get only about two- thirds of the daily recommendation for calcium.

Men and boys do better in the calcium department, generally because they can eat more calories. But, males who are not good consumers of dairy foods can also reap benefits from increased calcium intake.

Age and life-style factors affect calcium needs.
The ability to absorb calcium decreases with age. Most adults over age 50 need more calcium, particularly women after menopause who are not on hormone replacement therapy. Diets high in protein, sodium, or calcium increase excretion of calcium from the body, increasing the need for calcium intake. Smoking or using alcohol have the same effect on excretion, and the need for calcium.

Knowing that many consumers are worried about their calcium intake, food manufacturers are beginning to fortify some foods with calcium. These foods would not ordinarily be calcium sources. Look for:

Calcium fortified fruit juices
Minute Maid drink boxes of orange, cherry, and grape juice.
Minute Maid frozen orange juice and orange tangerine juice.
Tropicana, Minute Maid, and Best Buy refrigerated orange juice and Tropicana grapefruit juice (1/2 gallons and gallons).

Calcium fortified grain products
Spaghetti: Skinner and American Beauty
Cereals: Basic 4, Total Raisin Bran, Total Corn Flakes, and Total Whole Grain
Nutri-Grain bars

Calcium absorption is improved by having adequate amounts of vitamin D available. You may think of the sun as your vitamin D source, but age influences our ability to use this source so dietary intake be comes more important. Milk had been the only food fortified with vitamin D, but now Blue Bunny yogurt is fortified with this vitamin.

How much calcium do you need?

Age mg. calcium/day Equivalent in cups  of milk
1-3 yrs 500 mg. 1.7 cups
4-8 yrs. 800 mg. 2.7 cups
9-18 yrs. 1,300 mg. 4.3 cups
19-50 yrs. 1,000 mg. 3.3 cups
51+ yrs. 1,200 mg. 4.0 cups

As you can see, the advertising statement that "You never outgrow your need for milk" is true. Calcium is a nutrient needed for health through our entire life span and milk is an important food source of both calcium and vitamin D.

For more information, purchase a copy of "Calcium and Vitamin D: What You Should Know!" at your county extension office. The bulletin includes information on calcium and vitamin D supplements and cautions. Bulletin Pm-153 is available for 50 cents.

Brand information is not intended as product endorsement, or as a complete listing of calcium fortified products in the marketplace. Other companies may already add or may begin to add calcium or vitamin D to their products. Watch food labels for information.

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 When Obstacles Get You Down

Wayne Kobberdahlby Wayne Kobberdahl, ISU Extension Field Specialist/Communities, Mills County
Phone: 712-624-8616 - e-mail:

I am sure at one time or another everyone has had a bad day at work, home, or wherever. When working on a project or idea, and a problem or obstacle confronts you, do you give up and search out another project, or do you keep plugging?

There are times when either course of action could be appropriate, but I was intrigued by individuals who plugged on as reported in Chicken Soup for the Soul: 101 Stories to Open the Heart and Rekindle the Spirit, by Canfield and Hansen.

After Fred Astaire's first screen test, a 1993 memo from the MGM testing director said, "Can't act. Slightly bald. Can dance a little." Astaire kept that memo over his fireplace in his Beverly Hills home.

Beethovan handled the violin awkwardly and preferred playing his own compositions instead of improving his technique. His teacher called him hopeless as a composer.

The teacher of famous opera singer Enrico Caruso said Caruso had no voice at all and could not sing.

Walt Disney was fired by a newspaper for lacking ideas. He also went bankrupt several times before he built Disneyland.

Eighteen publishers turned down Richard Bach's 10,000 word story about a soaring seagull before Macmillan finally published it in 1970. By 1975, Jonathon Livingston Seagull had sold more than seven million copies in the U.S. alone.

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 Prevent Home Fires

Shawn Shouseby Shawn Shouse, ISU Extension Field Specialist/Ag Engineering, SW Area Extension Center
Phone: 712-769-2600 - e-mail:

The single largest cause of home fires in Iowa is failure or misuse of heating devices. In many of these heating-related fires, the direct cause was combustible (burnable) objects placed too close to a heat source like a fireplace, wood stove or portable electric heater.

Burnable materials should be kept back several feet from heating devices. Surface temperatures of heating elements and fire boxes can reach several hundred degrees. Follow manufacturer's recommendations for separation distances and proper venting.

Overloaded electric cords are also a source of home fires. Many household extension cords are not heavy enough to run devices like power tools and portable heaters. Read the label to find the allow able load (amperage) that the cord can carry. Also make sure that extension cords are never placed under carpets or rugs that can trap heat and cause the cord to overheat.

Being aware of potential fire hazards and keeping working smoke detectors up in your home are your best lines of defense against deadly home fires.


Acreage Living is published monthly. For more information, contact your local county ISU Extension Office.
Editor: Shawn Shouse, ISU Extension FS/Ag Engineering, SW Area Extension, 53020 Hitchcock Avenue, Lewis, Iowa, 51544, Ph: 712/769-2600
Layout & Design: Paulette Cambridge, Office Assistant, SW Area Extension, 53020 Hitchcock Avenue, Lewis, Iowa 51544, Ph: 712/769-2600

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