Page 7 - Farm Bill Series_The 7 Things You Should Know

greatest lessons that the city dwellers have come to understand in these past two years is
this: Empty pocketbooks on the farm do not turn factory wheels in the city.”

Both Roosevelt and Wallace talked passionately about the economic interdependence between
farmers and consumers, but that interdependence also served them well politically. They put
together the “New Deal Coalition,” an alliance of voters comprising urban Jews, Catholics and
blacks, along with farmers and labor unions, in a fashion that powered the Democratic party for
decades.

Fast forward to 2010

Economic conditions on the farm in 2010 were dramatically different than the 1930s or for that
matter, any previous decade. And they were about to get even better.

The commodity markets were delivering like never before. Corn and soybean prices rallied to
record highs – driven in part by a drought that parched much of the nation in 2012. Fueled by the
drought and herd reduction in the Southwest, cattle prices were also on the upswing, reaching
$169 per hundred pounds in November 2014, the highest in history.

Farm and ranch balance sheets improved steadily from 2009 to 2014, providing an important – if
not problematic – backdrop to writing the farm bill. Despite the upbeat farm economy, farmers
were still receiving about $4.8 billion in fixed direct payments – regardless of what they planted.

Veterans of previous farm bills understood that the farm economy is cyclical and subject to a
wide variety of weather and financial risks all around the globe. And for every really positive
cycle, there will be a negative one. However, it’s hard to predict how deep and how long each
cycle will last.

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