An accomplished auctioneer, Gil Gutknecht spent Saturday afternoon at the Minnesota State Fair, hawking 4-Hers’ prize farm animals at inflated prices.

Tuesday, August 31, 1999

An accomplished auctioneer, Gil Gutknecht spent Saturday afternoon at the Minnesota State Fair, hawking 4-Hers’ prize farm animals at inflated prices. Annually, the buyers are more than willing to spend the extra buck for a good cause. Gutknecht, the First District U.S. Representative, remembered auctioning off a grand champion cow for more than $8,000 last year.

One can bet he wishes everything else in the farming industry could be so easy.

From the low hog prices in 1998 to the diving corn prices of 1999, the agriculture industry’s tailspin has forced the lawmaker to keep his ears open to suggestions. And there have been plenty of those.

"All over the map," said Gutknecht, who visited Austin Friday as part of a grueling week-long, crisscross tour of the district, "what you tend to hear from farmer to farmer varies."

Gutknecht did say there is at least one universal opinion out there: "We’re all in agreement that there needs to be a protection in place to keep the farm in the hands of the individual farmer," he said.

The Rochester Republican believes in what he calls "shock absorber" legislation. Many farmers call it a "safety net," but that’s a term Gutknecht prefers not to use, because the government simply "cannot guarantee a profit," for anybody, no matter the business.

A shock absorber may come in the form of revenue insurance, which would kick in when the price of, say, corn drops below the cost of production. Some farmers already have revenue insurance, but the government could make it more accessible, said Gutknecht.

But Gutknecht is cautious of short-term solutions.

Gutknecht’s No. 1 priority is insuring the long-term success of the farming industry. It’s a future that may depend on overhauling traditional practices.

For example, it’s been common for a farmer with 400 acres to plant 400 acres with crops, then take the crops to the open market.

But, asks Gutknecht, in what other industry would a business-owner mass produce his product before finding out what the market for his product was?

"We’ve never connected the production side with the market side," Gutknecht said of farming.

But it is happening. Gutknecht, who visited with Hormel Foods Corp. officials on Friday, said more than 70 percent of the hogs sold to Hormel are done so under contract.

Contract farming is widespread in the turkey industry.

A farmer under contract would not flourish from the $60 dollar per hundred-weight price of three years ago, but likewise would not go under like farmers did when prices reached $8 per hundred-weight as prices did in December 1998.

In addition to giving a farmer a sure-fire market, "contracts tend to balance out the highs and the lows," Gutknecht said.

But the abundance of contracts also skews the open market, which "no longer reflects real-market variables," Gutknecht said.

Mandatory reporting legislation, which will require more public information about the heretofore private contracts, is designed to give farmers more leverage on the open market.

Still, no matter that contracts give farmers a certain market, some farmers believe contracts to be downright "un-American," Gutknecht said.

But a stubborn refusal to explore such futures markets could cost farmers who operate out of their hip pocket.

There are those farmers – as of now a silent minority – who believe the legislators should do nothing with the current state of the farming other than to leave it alone. Gutknecht has heard from them. He said they tend to be younger, cost-conscious farmers, who operate in the most efficient manner possible, running their farms like any smooth-operating business.

There are those farmers who are making more money than ever before.

There are those who are frustrated beyond belief, hanging by a thread.

"The ag industry is a cyclical business," Gutknecht said. "But it’s difficult because you’re dealing with real people."