Pecking Away Farms' Profits

Hari Sreenivasan is a CBS News correspondent based in Dallas.
(AP Photo /Musadeq Sadeq)
Who is winning with high corn prices? Perhaps a few smart corn speculators on La Salle Street in Chicago are laughing in their new Bentleys, and maybe there are some newly wealthy corn farmers who might enjoy the high prices a bushel fetches these days, but when you look at how crucial corn is in the supply stream of food we consume, your wallet is going to feel anything but happy.

The connection between corn and meat is simple; most of the meat you eat is fed corn. (I say "you" because I was born a vegetarian and have stayed that way. No judgments, though!) The scene of bucolic beef cattle grazing grass their entire lives is a rarity. There are still small organic farm operations that do that, but the majority of beef cattle end up in a feed lot for the last leg of their lives, where they are fed a diet high in corn. Lack of mobility and constant feeding helps the cows "beef up" and reach your dinner table sooner.

Farmers like Steve Foglesong at the Black Gold Ranch can try to keep his cattle on grass feed longer, he can try to "take more cows to market" and consequently have less mouths to feed but at some point his input costs will have to get passed onto consumers. No cattle farmer likes to have to get rid of their herd until it's time because it takes two-to-three years to develop a single animal.

You'll actually feel the pinch faster if you are shopping for chicken or pork because the life cycles of these animals is shorter. When we caught up with David Hale, who helps run his tiny family farm in Campbell, Texas, he told us that the cycle of a chicken is somewhere around nine weeks and every time he has gone to buy feed for the past year, it has been higher. He even showed us his feed bills that were 50 percent higher than the year before – and they now included a fuel surcharge which wasn't there before.

The Windy Meadows chicken is somewhat a rare bird. For one thing, it is free range, meaning the 10,000 chickens run and cluck and do other chicken-things over several acres, instead of a 40 x 400-foot building. The Hales take the chickens to farmers markets in Dallas and sell to restaurants and individuals willing to pay a higher price for this type of chicken, so the Hales have a slightly larger profit. But is it is still being pecked away by feed prices. The downside is, unlike the chicken farm that sells to one of the mega-bird corporations like Tyson or Purdue, these tiny farms don't have steady contracts they can count on and as prices keep rising, they may begin testing even their best customers.

It doesn't seem like too long ago that I was standing in the floods of the Midwest and watching those corn and soy fields be washed over by one river or another. Dr. Barry Dunn of Texas A & M (my apologies if he didn't make it into our Evening News piece) pointed out that we haven't seen such a tight market perhaps in the post-WWII era. The demand for corn from ethanol refineries is essentially creating competition between those trying to provide us fuel and those trying to provide us food. Dunn also mentioned an idea that I hadn't thought of too much: how the composition of the soils on most farm land has changed in ways where perhaps it isn't as absorbent of water as it used to be, and how this could have lead to additional drainage and faster flooding and will continue to in the years to come.

It isn't too often that I get to be on a family farm where I'm not talking to them about what the river took away, or what the tornado tore down. So it is as interesting a cultural opportunity as a professional one. The Hales don't have a television (by choice) and the younger members of the family I met are home-schooled. They were some very bright young kids. You don't find many 10-year-olds in the city that have the type of breadth and depth of knowledge about any single topic the way these children do about farming. It almost seems that as the factory farm has taken over agriculture production, and increased mechanization replaces the need for bodies to work the fields, there is a certain kind of wisdom that may just stop being passed on from one generation to the next.

Speaking of factory farming and so forth, somewhat serendipitously my DVD rental service delivered me a documentary called King Corn around the time I was standing out in a corn field. It is an interesting introduction to how corn farming has changed, and the prevalence of high-fructose corn syrup. There is probably a kernel or two of truth in it. The documentary has clearly ticked off the corn industry enough that it seems to have purchased the keywords on Google. That means that every time you search for King Corn, the first sponsored link is to a page hosted by the Corn Refiner's Association. That link is here.

This is one of my first pieces where I'm not surrounded by polygamists in prairie dresses or up to my hips in one river or another. Sweatin' bullets in a corn field or chicken farm in Texas actually feels better than sitting at a desk sometimes.