By Matt Reese and Dusty Sonnenberg
Ohio’s corn, soybean and wheat producers gathered in Columbus this week for the 2019 Ohio Grain Farmers Symposium. Guests heard from Director Dorothy Pelanda, Ohio Department of Agriculture, and Cathann Kress, Dean of the College of Food, Agriculture and Environmental Sciences at The Ohio State University.
In addition Ben Brown, OSU Farm Management Program Manager, covered a wide array of topics about the current farm economy and the outlook moving forward. One important part of that conversation was the Market Facilitation Program (MFP) payments.
“We can attribute a lot of the factors behind the Ohio farm economy and decisions around grain marketing and planting to the MFP,” Brown said. “It is helping farm income and providing cash. Instead of having to manage grain in a bin, we have these payments. This is creating some liquidity at the farm level that is propping up balance sheets. If you ask bankers they will tell you the exact same thing,”
The program provided a much-needed influx of farm funds with ongoing trade issues taking their toll on agricultural markets. The MFP does have some unintended consequences, however.
“One of the downsides to the MFP is that it is tied to planted acres. You had to plant something to get the MFP or plant a harvestable cover crop. I think that is why we came in with 90 million acres of corn,” Brown said. “It influenced planting decisions and now we are on the back end. People are holding onto grain hoping for higher prices. They don’t need to sell grain right now to generate cash. MFP is definitely a factor in a lot of ways. I think we’d all rather have free market trade, but this is the reality right now.”
Another major factor in 2019 was the huge amount of prevented planting acres this spring.
“Maybe the best thing that happened nationally to balance sheets for corn and soybeans was that we had a production shortfall. We would have loved for this production shortfall to happen somewhere else in the world, but it did help bring prices back to levels that made cash flow a little more palatable,” Brown said. “If we think about prevented planting, it did make economic sense in some situations, based on the prices we are seeing and the projections of expenses looking forward. We’d be facing very low commodity prices right now if those acres had been planted. It played a huge role in getting us back into a better situation than we were in before, but I think as we head into 2020 we’ll see a return to stocks of corn and soybeans that are above where we need to be. We still have to see acreage reductions somewhere. I’m not seeing the demand drivers to support higher prices right now.”
In addition at the event, Aaron Wilson, OSU Atmospheric Scientist led a breakout session about climate change, and Scott Shearer, Chair of the Department of Food Agricultural and Biological Engineering, led a breakout session about technology. Additional breakout sessions focused on: trade, water quality, farm finance, small refinery waivers, H2Ohio, and grain supply/carryover.