Cold snap and farm support freeze
Conditions like the bitter cold that holds much of the United States in its grip show just how unpredictable the nation's farm economy is from year to year. It also demonstrates why the US should have a farm policy that protects growers against losses from such unexpected situations, while ensuring ample production that meets domestic consumer needs as well as overseas food demands.
Reports of major crop losses in the South come just as the Reagan administration is seeking to hold the line on federal farm subsidy costs in the new fiscal 1985 budget now being put together. The overall federal farm-subsidy payout for 1983 is already estimated at over $22 billion. That compares with $13 billion for 1982.
Whether the crop losses now believed occurring in the South - especially involving Florida's citrus crop as well as some vegetable fields - will mean additional US outlays, is not yet known. But consumer prices could rise next year, since Florida produces a large part of the nation's overall citrus crop. Much of the Florida crop goes into juice, unlike the California crop, which is geared to fresh-fruit sales. So, if emergency harvesting proceeds at current intense levels and the cold weather abates, the impact of the cold spell on prices might not be overly large. That depends, however, on what happens the next few weeks.
Regarding the larger issue of US farm costs, the administration is leaning toward a new effort to freeze target price supports during 1985. Under the target price program, farmers receive the difference between the market price for their commodities and the particular target price set by Congress. Congress rejected administration efforts to freeze target prices this year.
If target prices are not frozen or slowed, subsidy costs will continue to rise during 1984. That means additional costs for already hard-pressed taxpayers - as well as new pressures on budget deficits.
Higher government price-support costs would also hit consumers with a double whammy, since food costs are already expected to climb during 1984. Why is that? Because a number of key crops were down substantially during 1983, largely because of adverse weather. The corn crop is estimated at around 4.1 billion bushels, compared with the record 8.4 billion bushels in 1982. The wheat crop is down to some 2.4 billion bushels, compared with 2.8 billion bushels in 1982.
Looking ahead, there are a few bright spots for consumers. Plantings for the current winter wheat crop are now estimated to total some 65 million acres, compared with 63 million acres last year. Actual harvesting will begin next May or so in Southern regions. And the recent cold spell need not prove harmful to winter wheat, provided there is a covering of insulation, such as snow.
Still, because food prices are expected to rise next year, it is important that Congress reduce the rate of increase in subsidies. This year the House, but not the Senate, voted to curb target-price levels. Congress should accept such a plan in 1984. Federal farm costs need to be brought under control.