Margy Fischer, Farm Journal's Machinery editor, discovered this summer used corn heads are hot items in farm country as southern farmers gear up for corn instead of rice and cotton.(Read more about it in this summer's issue)
Looks like that market won't be cooling off soon. The WTO has issued a temporary ruling that could hardly be called unexpected.
The World Trade Organization largely ruled against the United States in an interim decision that it has failed to scrap a series of what the trade body says is illegal subsidies paid out to American cotton growers, U.S. and Brazilian trade officials said Friday.I would guess the prevailing sentiment in cotton country in suppressed panic, but the House vote on the new farm bill preserves much of the disputed payment scheme supported by the cotton industry. Still with the massive shift in acres, one has to wonder if deep in their hearts cotton growers are not reading some handwriting on some wall somewhere.
The interim ruling was handed out confidentially to the parties late Friday. A final verdict, expected in September, could open the door for billions of dollars worth of Brazilian trade sanctions against the United States.
WTO panels rarely change their findings between preliminary and final rulings, and the apparent result is a major victory for Brazil's cotton industry and West African countries that have claimed to have been harmed by the American payments. [More]
The ruling offers another justification for a farm bill veto, something now slightly more thinkable. Certainly many non-farm sectors are dismayed by the adoption of what are now clearly trade obstacles.
The decision of most farmers to ignore possible WTO ramifications implies a growing ambivalence to export markets, especially for corn farmers - the largest single group. Heck - we'll just turn it all into ethanol, a seemingly endless demand source.
But corn is the only commodity with that luxury, and as nations retaliate legally, our choices of what we grow will dwindle to one. And once that happens, there will be few ways to adjust to rising input costs. By focusing on only one customer, we could discover what thousands of WalMart suppliers have: we have forfeited the control of our own business.