The Beaumont Enterprise | January 9, 2002 | By Dan Wallach
Cattle prices are up, but rice is down.
And a new federal farm bill that could affect agriculture for years to come is nowhere near being finished, analysts told a group of Southeast Texas farmers Tuesday.
Closed markets, such as Cuba, Iraq and Iran, also are a political obstacle that domestic farmers cannot overcome on their own in spite of weather, crop yield, supply and demand, and international competition.
"Iraq was 25 percent of the (U.S. export) market before the Gulf War," said Tom Kelley, a partner in Wiese Crop Insurance of Eagle Lake, west of Houston. "Iran and Cuba were also big," he said.
Kelley lives in Sugar Land, also west of Houston, and the hometown of Republican U.S. Rep. Tom DeLay, the House majority leader and the chief opponent of reopening Cuba to American farmers.
"He is predominantly responsible for keeping Cuba closed" to U.S. farmers Kelley said.
Southeast Texas rice farmers and U.S. Rep. Nick Lampson visited Cuba in 1999 to explore renewing trade.
On Tuesday, Lampson joined with representatives of a group called Farmland Industries to ship 66 million pounds of red winter wheat originating from Texas, Oklahoma and Kansas through the Port of Galveston to Cuba as part of a $ 35 million program to help Cuba recover from Hurricane Michelle. The storm struck in November.
"This shows the potential economic benefit that trade with Cuba can provide to Texas farmers and Texas ports," Lampson said in a prepared statement.
He said it is the first commercial shipment of American wheat to Cuba in the 40 years since the United States placed an embargo on shipments to Cuba.
Beaumont rice farmer Mike Doguet said embargoes do not affect the rulers of the targeted countries, only the poor people who live there.
"All it's done is help our competitors," Doguet said.
David Anderson, an extension economist with Texas A&M University, told the agricultural group that the U.S. exports 40 percent of its rice production and that accounts for 12 percent to 15 percent of the world's exports.
He said some of the factors depressing rice prices include high worldwide production, economic problems in countries that buy rice, and large inventories.
"Nothing appears to be changing that," he said. "Rice has run into national security issues."
In Texas in the past 20 years, planted rice acreage shrank to about 213,000 acres from 450,000 acres, he said.
Kelley said the declining agricultural base also hurts what he called the farm infrastructure that includes equipment dealers, parts stores, dryers, and mills.
"In the long term, it makes all the difference to restore the markets so we're not all on a great, big government welfare program," he said.
Jim Sartwelle, another extension economist from A&M, delivered the sole bright spot of the program because cattle prices should stay favorable through 2004.
That's because severe droughts in 1996 and 1998 caused ranchers to reduce their herds, he said.
"For the third year in a row, I'm the only one with good news," Sartwelle said.
Herds in Texas as of Jan. 1 are about the same level they were a year ago, he said.
Slaughter in 2001 was up about 14 percent compared to the previous year, he said.
Exports are strong, particularly to Japan.
American beef is in demand because of disease scares around the world in the past two years, notably foot and mouth disease and mad cow disease.
Meanwhile, the U.S. Senate will return to work Jan. 23 to take up the farm bill.
The Republican-led House passed its version late last year, but it differs significantly from what the Democratic majority in the Senate is considering, the analysts said.
The Senate is looking more at conservation reserve programs, which pays farmers not to plant row crops such as corn and soybeans.
"Everything is in limbo now," he said. "We won't see anything for a couple of weeks."
That program has almost no impact on Texas rice farmers, Kelley said.
Copyright 2002 Knight Ridder/Tribune Business News, Copyright 2002 The Beaumont EnterpriseThe Beaumont Enterprise:
