As much or more than two-thirds of our state's crop land is dominated by just two types of plant: corn and soybeans.
This is a big and growing problem. One that, for about 10 years, has been obscured by high prices and relative boom times for many of our state's farmers. Not so long ago, corn was fetching around $8 per bushel. That may not seem like too much to the non-farming public but, if you can raise an average of 200 bushels on each acre of a 160-acre quarter section, you've raised about $256,000 worth of grain. The average size of a farm in South Dakota this year is a hair over 1,400 acres.
The prices certainly are down from that record high. Yesterday, for example, the average price per bushel in the U.S. was about $3.53. The drop in price is due, in no small part, to a glut of corn having been grown in response to extraordinarily high prices.
And therein lies one aspect of the problem — there's too much reliance on too few types of crop. The price of corn has been inflated, artificially many would say, by the rise of ethanol as an alternative fuel source for our beloved cars and SUVs.
The ethanol industry has benefited greatly from generous, though often indirect, subsidies from all levels of government. One notable federal example is the Renewable Fuel Standard, which forces oil companies to mix ethanol into their gasoline. There also are the federal farm programs that help lower the risks of farming, thus lowering the price of such things as corn.
While low corn prices certainly benefit the corporations that produce ethanol, they're not always great for the folks who grow the corn. In a market not affected by government interference, the overabundance of corn would be solved by suppliers simply choosing not to grow so much corn.
The problem is that our farm programs often discourage farmers from planting a more diverse mix of crops. Diversification should be encouraged whenever possible. It's more profitable for farmers over the long term.
The Capital Journal (Pierre, S.D.), Sept. 26.