ST. LOUIS, MO. A com
prehensive study of
entitled “Com 2000 - Value and
Policy,” has just been completed
for the National Com Growers
Association (NCGA).
The study, underwritten by com
checkoff funds from the Illinois
Com Marketing Board, Missouri
Com Merchandising Council and
South Dakota Corn Utilization
Council, was conducted by
Temple, Barker & Sloane, Inc.,
Lexington, Mass.
“As discussion of the 1990
Farm Bill has escalated, questions
have been asked if com target
prices are out of line with other
feed grains and commodity target
prices,” says NCGA President
Alan Kemper, a Lafayette, Ind.,
com farmer. “The study examines
the relationship of com target
prices to basic feed values, world
prices and other commodity
prices, and concludes they (com
target prices) are ‘in sync’ with
other commodities.”
Kemper says that he and other
NCGA leaders and staff recently
delivered a copy of the study to
USDA Deputy Undersecretary for
International Affairs and Com
modity Programs Richard Crow
der, and discussed the study with
him. “We plan to meet with him in
the future regarding com target
prices and other farm program
issues such as reserves.”
The study examines the role
and performance of target prices
as part of U.S. agricultural com
modity price and income support
policy. It focuses particularly on
the relationship between the target
pices of different crops and how
they might rationally be main
tained in the future.
The principal findings and con
clusions of the paper were:
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NCGA Completes Target
• The alignment of current
target prices for feed grains is
rational based on their nutritional
value.
• The alignment of feed grain
target prices with those of other
program commodities presents a
mixed picture. The relationship
between the target prices of those
commodities in which the U.S.A.
has achieved a competitive advan
tage in world trade, is relatively
rational, but the world price of
some program commodities
exceeds their current target prices.
A rational process for the estab
lishment of target price levels
would involve the following,
sequential steps;
• establish a target price for a
strategic commodity, say barley,
at a level that will provide suffi
cient income to enough farmers
that the U.S.A.’s volume needs for
barley are met
• use the barley target price as
the base for all feed grain target
prices according to comparative
feed value, so that target prices for
com and the others are set at the
appropriate premium or discount.
• calculate target prices for the
program commodities other than
feed grains, using the com target
price as the base, according to
their long-term world price in
comparison with that of com.
• assess the strategic value of
supporting commodities such as
wheat, barley, rice and cotton.
• modify the target pices few
wheat, rice and cotton so as to
meet the U.S.A.’s volume objec
tives for each commodity.
The foregoing findings and
conclusions were reached as
follows.
• Four approaches to the setting
of target pices were evaluated for
their theoretical soundness: pro-
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duction cost per acre, income per
acre, relative feed value (for feed
grains), relative market value.
Three of these approaches were
ultimately used to analyze the per
iod 1976 to 1988. (Crop produc
tion costs as a basis was rejected
on the grounds it would present
insoluble problems erf cost mea
surement, and its implementation
would result in misallocation of
agricultural resources, and imba
lances in supply and demand for
feed grains.)
Income per acre
• Between 1976 and 1986,
target prices would have provided
consistent income per acre, in real
terms, for all the program crops
examined.
• However, this consistent
income has been reduced by (a)
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Biodegradable Bags Launched
SPRINGFIELD, IL. In a
move to reduce solid waste, offi
cials of the City of Springfield,
111., recently announced a leaf col
lection and compost program
using biodegradable plastic com
post bags, made partially from
cornstarch.
Residents of the capital city of
Illinois were offered a free pack
age of 10 biodegradable bags for
use in the program, which began
November 6.
Once filled, the specially
marked biodegradable bags will
be picked up by city waste haulers
and deposited at a compost facili
ty, where decomposition of the
grass, leaves and bags will occur.
Composting landscape wastes
can reduce nearly 20 percent of
the total volume of solid waste
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Price Study
declining target prices since 1986,
and (b) persistent ARPs.
Relative feed value
(for feed grains)
The feed energy value of com
and sorghum compared to barley
and oats suggests a greater pre
mium in their respective target
prices than currently exists—
unless one looks to die hitters’ pre-
mium use as a dairy feed. Alterna
tively one can give an additional
value to the extra protein content
of barley and oats over com that
would also suggest their current
target prices are fair. Since current
target prices closely match feed
value, no rational argument for
modifying the current target prices
on the basis of feed value can be
made.
presently being dumped in land
fills, and renews a natural resource
- soil.
In announcing the program,
Springfield’s Public Works Direc
tor Todd Renfrow congratulated
city aldermen for their foresight
and initiative in implementing the
composting program one year
before the Illinois law bans all
cities from dumping leaves and
grass clippings in landfills.
Working with the City of
Springfield by providing 350,000
cornstarch-based biodegradable
bags were. North American Plas
tics Corporation, Archer Daniels
Midland Company, Dow Chemi
cal Company and the Illinois and
National Corn Growers
Associations.
“We anticipate many cities and
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Relative market value
• The world prices between
1976 and 1988, in real terms, are
close to 1988 target prices for
those crops in which the U.S.A.
has achieved a competitive advan
tage in world trade: com, sorg
hum, and also soybeans (talcing as
a proxy few its target price the
break-even equivalent of the com
target price).
• Wheat and barley 1988 target
prices are somewhat high in rela
tion to world prices, due principal
ly to the policy of the E.C., a lead
ing exporter of both commodities,
that disposes of production sur
pluses by driving down prices.
The U.S.A. aggressively competes
with the E.C. and strategically
supports wheat and barley
production.
towns across the country will
implement similar programs using
biodegradable bags,” says Randy
Cruise, market development
chairman for the National Com
Growers Association (NCGA)
and a Pleasanton, Neb., corn
farmer.
Cruise says demand for biode
gradable plastic products such as
garbage and compost bags and
disposable diapers is “taking off’
throughout the U.S. as landfills
begin to reach capacity levels.
According to Cruise, biode
gradable plastic compost bags will
decompose in approximately 12 to
24 months, compared with 200
years for regular plastics.
Cruise estimates the growth in
the biodegradable plastic market
could result in future annual use of
150 million to 300 million bushels
of com.
NCGA and its 22 affiliated
states have served as a catalyst in
developing new industrial markets
for com such as biodegradable
plastics.