9-24-98

Contacts:
Stan Johnson, University Extension, (515) 294-6192
John Miranowski, Economics, (515) 294-6741
John McCarroll, University Relations, (515) 294-6136

FARM ECONOMY TEAM FORMED TO RESPOND TO AG ISSUES

AMES, Iowa -- A team of Iowa State University faculty and staff has been formed to ensure ISU's comprehensive resources are available to respond to agricultural and other issues associated with the decline in farm commodity prices.

The ISU Farm Economy Team includes members from all eight colleges, several administrative units and University Extension. The ad hoc group will identify the primary points of contact at ISU for farmers, agribusiness operators and rural residents who are trying to deal with economic problems tied to the current low commodity prices. The Farm Economy Team also will monitor the farm economy situation resulting from low farm prices in Iowa and identify the need for ISU services.

"We want to ensure we do all we can to provide timely assistance across the state," said ISU President Martin Jischke. "Iowa State has the expertise to help deal with a multitude of economic, business and human problems not only on farms, but also in communities that depend largely on farm income."

Iowa farmers are facing low prices for the state's four major farm commodities: corn, soybeans, hogs and cattle. Declining farm commodity exports resulting from economic problems in southeast Asia and central Europe are contributing to the low prices. According to ISU economists, Iowa's production this year will be higher, compared with recent years. Corn and soybean production and beef and pork supplies also are up, compared with last year.

These market conditions may lead to questions about the federal farm program, options available to farmers, farm credit, personal finance, business outlooks, crop insurance, taxes and a variety of related human problems. The Farm Economy Team is preparing an inventory of ISU services that are designed to support farmers and citizens tied to the farm economy.

A recent ISU comparison of production costs and current prices indicates farmers generally are able to cover their variable costs, including seed, feed, fertilizer and labor. However, they are not covering total costs of production, which include land, equipment investments and buildings.

"Today's price situation certainly needs our attention, but it is not expected we will see a repeat of the farm crisis of the 1980s," said John Miranowski, chairman of the ISU department of economics and expert in agricultural economics. "Unlike the 1980s, Iowa farmers today are carrying lower debt loads, interest rates are in the single digits and land values are stronger and more stable."

The ISU Farm Economy Team is headed by Stan Johnson, vice provost for Extension.

"We are mobilized to respond to questions and concerns about the impact of low farm prices. This is a particularly timely effort because farmers are preparing for the harvest and need to make financial decisions about their crops," Johnson said.

Agriculture represents more than $11 billion annually to the Iowa economy, including nearly one of every four Iowa jobs.

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NOTE TO MEDIA:

A report by John Miranowski on declining farm commodity prices, "Assessing the Situation: Implications for Iowa Agriculture," is available by calling the Office of the Vice Provost for Extension, (515) 294-6192.

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