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A short form parity study

A hundred years ago, or maybe half a hundred, I helped my Dad and Uncle Harry gather dry cows.

We trailed them out to the Dwyer stockyards (no longer in business) and loaded them on a C&S boxcar (no longer in business) and sent them to Denver Union stockyards, consigned to Mann Boyd and Mann (no longer in business… seems to be a pattern developing here).

In Denver, they cut out some three and four year old heiferettes and sold them for 32 cents a pound – a record at that time. They weighed about 1000 pounds.

The point of the story is not to confess that I am no longer really young. The keenest among you have already figured that out. No, the point of the tale is that Dad took the proceeds from six of those»… cows, went to Ben Hall Chevrolet in Wheatland and bought a new pickup. No four wheel drive, no radio, no air, but an honest-to-John new vehicle with a wheel on each corner and an engine. It would be hard to special order one just like that today. Hard, but possible. But not for six dry cows. You have just read a short form explanation of parity. Parity formulas can cause eyes to glaze over when they cite the historical 1910-1914 base. Parity is really the relationship between the market price of a commodity and the costs of the inputs required to produce it. If a bushel of wheat bought a pair of overalls in 1910, it still should. I used to track the dry-cow/pickup ratio until it got too depressing. I do remember that in the early ‘60s it would have taken about 35 cows. And it got worse. My wheat-farming neighbors remember $4.50 wheat and $1,948 combine prices. Recently, when wheat was around $2, I remember asking one of them how many bushels it would take to buy a combine today. “Oh, 75,000 or so,” he said. Fortunately, he’s a young man with lots of time raise it. Of course, most of the aforesaid wheat farming neighbors are long since enrolled in CRP. It all comes down to this. We need a fair price for our products. It shouldn’t take an annual $10 million bailout or so-called drought relief program to supplement farm income. The money should be in the market and we got a lot closer to it with support programs – before decoupling. The three least productive ideas of the past decade have to be GATT, NAFTA and Freedom to Farm. And time and again, some alleged national leader or another counsels us that our future is global in scope and that we can export ourselves rich. Which, if believed, would be a clear triumph of hope over experience. Forgive us, please, if we’re something less than eager to compete for the dubious honor of being the world’s lowest cost producers. Against continents where expenditures for land, labor and environmental costs are all negligible. I don’t think so. Agriculture is clearly in a disastrous hole. And what’s the one best thing to do when you find yourself in a deep hole? Quit digging.