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Global Demand, Fluctuating Commodity Prices Worry US Farmers

The United States is the leading producer of corn and soybeans worldwide. According to a study conducted by the University of Illinois, U.S. farmers will spend roughly thirty percent more this year to plant those crops. This comes as demand from countries that import food is slowing. U.S. farmers are bracing for an uncertain year.

It's just after 6 a.m., a typical start to a day in the life of Brent Scholl, an Illinois farmer running a 100-year-old family business.

His first chore is rounding up pigs to send them to the slaughterhouse. Each pig translates into dollars that Scholl will spend on equipment, more pigs, his farm, and his family.

"You spend a lot of dollars, you take in a lot of dollars but you don't keep a lot of dollars, but dollars flow always," said Scholl.

For the last several months, more dollars have been flowing away from Scholl's farm. Though none of his pigs are infected, concerns about the A-H1N1 virus known as swine flu have cut demand for pork and that has affected Scholl's profits.

But Scholl is not just a hog farmer. His next chore is loading the planters with corn and soybean seed before heading to the fields.

It's late in the planting season after an unusually wet spring, and the clock is ticking to get crops planted.

Because of the wet spring, the U.S. Department of Agriculture anticipates a tight supply of corn and soybeans in the fall, which could boost prices. For Scholl, that good news is overshadowed by the increased costs associated with growing his crops.

"We are at record high on what the fertilizer was going to be. I think next year it's going to be a lot less but we still have to work through the fertilizer that was in the pipeline from last year yet," he said.

There is also the lingering fear of how the global economic downturn will affect prices when the crops are ready for sale in the fall.

"This recession is a bit different than other ones," said Gary Schnitkey, a professor of farm management at the University of Illinois in Urbana. "One of the big things that have happened this time that's different from the previous times is the amount of volatility that's out there as far as prices."

In 2008, a World Bank study attributed the growing demand for biofuel as the leading factor in the rise in food prices.

That helped U.S. farmers last year, when prices for corn and soybeans reached an all time high. But this year, with the cost of petroleum down, the demand for biofuels has declined.

So has the global demand for food, particularly in countries such as China and India.

"With those fears of recession and depression worldwide, that would reduce income levels in China and India, which would reduce demand for food products," said Schnitkey.

Regardless, Brent Scholl still needs to make money and feed his family. Despite the grim outlook, he is upbeat.

"It does test your strength in God and religion and where all that is at times, like any good job will do that," he said. "You rely on family and you rely on friends and hopefully your knowledge that you are smart enough to figure it out some days."

Scholl says with his children on their way to college, he isn't sure if farming will be attractive enough to keep the farm in the family for future generations. But because of the sluggish job market, farming may be one of the few jobs available when his children enter the work force.

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    Kane Farabaugh

    Kane Farabaugh is the Midwest Correspondent for Voice of America, where since 2008 he has established Voice of America's presence in the heartland of America.