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Some farmers are planning to feed some of the excess wheat to livestock. But that would further lower the price of corn, the principal animal feed, by reducing demand. Farmers have planted almost 84 million acres of corn, about the same as last year, when they grew a record 6.2 billion bu. Growers are concerned that the huge crop will cause corn prices to fall well below their current level of $2.35 per bu., which is nearly 20% lower than last year's price. Of all the nation's farmers, the best off are the growers of soybeans, which are in great demand for use in livestock feed and a wide variety of foods. Prices for soybeans have climbed from an average $5.25 per bu. last year to as high as $10.27 this year—and could go higher still.
The huge crops and falling farm incomes pose a monumental problem for the Carter Administration, which wants to help farmers without pushing prices too high. The main point of contention between the White House and Congress is the level of the so-called loan support and target prices to be included in a new farm bill. Under the present system, if market prices for wheat fall below a "target" of $2.47, the farmers get a Government check to make up the difference.
Open Confrontation. Peanut Farmer Carter has proposed raising the targets in 1978 to $2.90 for wheat and $2 for corn (v. $ 1.70 now). He calculates the cost to taxpayers at $2 billion a year, and has theatened to veto any farm measure that raises the tag. But the Senate has passed a bill that would cost almost twice as much; the House is preparing to vote on a measure priced at $2.3 billion. Both want to raise target prices this year. The differing versions will have to be reconciled in a joint conference, and the final bill is not expected to reach the President's desk before August.
Many economists believe that Carter's proposals are more than adequate to stabilize farm prices without driving them so high that U.S. goods are forced out of foreign markets. High price supports, critics contend, fuel inflation, tempt farmers to grow more than they can sell and enable less efficient growers to pursue wasteful ways. So far, legislators do not agree—and unless they back down, the stage is being set for an open confrontation between Carter and a Congress controlled by his own party.