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Illinois GRT is a bad idea

USDA’s recent Planting Intentions report of 90.5 million prospective planted acres is indeed a big story. Even national network television programs featured news segments with Midwestern farmers focusing on the biggest anticipated corn crop in the U.S. since 1944.

90.5 million acres. Now that’s a lot of corn. Ethanol and what it has done for corn demand is the driver behind this biggest anticipated corn crop in 63 years, according to Terry Francl, senior economist for the American Farm Bureau Federation. Francl himself was one of those experts featured on national news coverage of planting intentions. His own prognostication of the 2007 corn crop is three million acres below the federal government’s.

Francl told Brownfield that he believes USDA’s 90.5 million prospective planted acres is the result of good corn demand from several fronts. Doubling in corn used for ethanol over a six year period followed by an additional doubling over the next three years is central to farmers’ decision to grow more corn. The AFBF economist believes ethanol usage will increase eight to ten percent per year over the next couple of years.

For some, the recent jump in corn prices has been bittersweet. As corn prices have doubled, so has the price tag for those who buy corn to feed livestock. Brownfield commentator Steve Kopperud with Policy Directives in Washington, D.C. writes in his blog, “Generally, lower prices result from oversupply compared to demand. But demand for ethanol, feed, food, industrial uses and exports shows no signs of abating, so why this interim sigh of relief?”

Steve believes we’re looking at corn prices which will hover for the foreseeable future at what will inevitably come to be known as the ‘new normal’ price for corn. He writes, “I believe the days of $2-2.50 corn are going to become one of those things we tell our grandkids about.”

Growing corn is still a risky business, regardless of the hardier hybrids with so many beneficial traits, better technology and all of the risk management tools available today. Farmers are still at the mercy of the weather. And of course there are those in the state of Illinois who apparently don’t give a rip whether any farmers survive in the business that is the backbone of this country.

We thought corn farmers who have lived with rising input costs and the same old $2 corn for decades who are finally getting paid a decent price for their crop would breathe new life into rural communities. But don’t put on the party hats quite yet. It looks like the governor’s plan to tax you on gross receipts is picking up momentum. In my personal opinion, the proposed gross receipts tax (GRT) is an example of leadership out of reach with farmers. Sure, the proposal is for those who have gross sales of $1 million per year or more, but everyone from the farmer with less than $1 million in gross receipts to the consumer, will feel the impact of this tax.

We’ll see higher prices for all sorts of crop and livestock inputs like feed, seed, machinery and fertilizer, sending some Illinois farmers west into my new home state of Missouri or Iowa, north to Wisconsin or east to Indiana, to buy inputs.

GRT is a bad idea. Read between the lines on this one before signing away your future and the future of agriculture in the state of Illinois.

Call your State Representative. If you don’t know who that is, call your county Farm Bureau office and ask them for the names, numbers and addresses of those who represent you in Springfield.