Global Demand, Fluctuating Commodity Prices Worry Us Farmers

The United States is the leading producer of corn and soybeansworldwide. According to a study conducted by the University ofIllinois, U.S. farmers will spend roughly thirty percent more this yearto plant those crops. This comes as demand from countries that importfood is slowing. U.S. farmers are bracing for an uncertain year.

Brent SchollIt'sjust after 6 a.m., a typical start to a day in the life of BrentScholl, an Illinois farmer running a 100-year-old family business.

Hisfirst chore is rounding up pigs to send them to the slaughterhouse.Each pig translates into dollars that Scholl will spend on equipment,more pigs, his farm, and his family.

"You spend a lot ofdollars, you take in a lot of dollars but you don't keep a lot ofdollars, but dollars flow always," said Scholl.

For the lastseveral months, more dollars have been flowing away from Scholl'sfarm. Though none of his pigs are infected, concerns about the A-H1N1virus known as swine flu have cut demand for pork and that has affectedScholl's profits.  

But Scholl is not just a hog farmer. Hisnext chore is loading the planters with corn and soybean seed beforeheading to the fields.

Scholl preparing farm for planting seasonsIt's late in the planting season after an unusually wet spring, and the clock is ticking to get crops planted.

Becauseof the wet spring, the U.S. Department of Agriculture anticipates atight supply of corn and soybeans in the fall, which could boostprices. For Scholl, that good news is overshadowed by the increasedcosts associated with growing his crops.

"We are at record highon what the fertilizer was going to be. I think next year it's goingto be a lot less but we still have to work through the fertilizer thatwas in the pipeline from last year yet," he said.

There is alsothe lingering fear of how the global economic downturn will affectprices when the crops are ready for sale in the fall.

Gary Schnitkey"Thisrecession is a bit different than other ones," said Gary Schnitkey, aprofessor of farm management at the University of Illinois in Urbana. "Oneof the big things that have happened this time that's different fromthe previous times is the amount of volatility that's out there as faras prices."

In 2008, a World Bank study attributed the growing demand for biofuel as the leading factor in the rise in food prices.

Thathelped U.S. farmers last year, when prices for corn and soybeansreached an all time high. But this year, with the cost of petroleumdown, the demand for biofuels has declined.

So has the global demand for food, particularly in countries such as China and India.

"Withthose fears of recession and depression worldwide, that would reduceincome levels in China and India, which would reduce demand for foodproducts," said Schnitkey.

Regardless, Brent Scholl still needs to make money and feed his family. Despite the grim outlook, he is upbeat.

"Itdoes test your strength in God and religion and where all that is attimes, like any good job will do that," he said. "You rely on familyand you rely on friends and hopefully your knowledge that you are smartenough to figure it out some days."

Scholl says with hischildren on their way to college, he isn't sure if farming will beattractive enough to keep the farm in the family for futuregenerations. But because of the sluggish job market, farming may beone of the few jobs available when his children enter the work force.