As the nation struggles to emerge from a recession and uncertain prospects for the future, farmers are feeling good about the agricultural economy.
Farming is profitable now and some sectors are experiencing record profits. But many farmers are still uneasy about the future -- and much of their uncertainty has to do with government farm policies.
That sentiment was unmistakable at the annual Farmfest show that got underway Tuesday in southwest Minnesota. More than 35,000 farmers and others interested in agriculture are expected to tramp across the Farmfest grounds near Redwood Falls before the annual event ends on Thursday.
At Farmfest, farmers will pick up tips on how to make their operations more profitable and see the latest developments in farm equipment, most of it very expensive. A tractor can cost $200,000 or more.
The size of the event is testimony to the role agriculture plays in the state economy. Delivering the keynote address at Farmfest, Gov. Mark Dayton said agriculture contributes billions of dollars to the state's economy.
"Minnesota ranks as the sixth-leading state in the nation in domestic agricultural production," Dayton said. "According to USDA, the value of all of Minnesota's agricultural production in 2008, the last year available, was almost $16 billion."
The state's agricultural sector may top that figure this year. Cattle, hog and corn prices are close to all-time highs. Crops this summer have suffered occasionally from too much rain, but overall, farmers still expect to find average to above average yields when they harvest their fields this fall.
Dayton said he'll be involved in efforts to generate more income for farmers. He plans to travel to Korea in September, and possibly to China later in the year, in part to try and expand state farm exports.
Don Schiefelbein, president of the Minnesota Cattlemen's Association, said most farmers have never had it so good.
"This is actually the best period we've ever had," he said.
But even in these good times, some see signs of trouble. Schiefelbein said the livestock sector is the most heavily regulated part of agriculture. He said there's so much red tape, it scares some farmers.
"I've talked to three people in the last two weeks who want to expand and get more of their family members involved," Schiefelbein said. "But they are so worried that expansion may trigger other regulations that they might have to contend with, that they're saying, 'I think we're going to stay at the size we're at, because at least we know what the rules are.'"
Yet many environmental groups question whether the state's regulation of agriculture is tough enough. Among other issues, they say farmers in Minnesota and across the Midwest are major contributors to pollution which helps cause the Gulf of Mexico's annual "dead zone" each year.
But Dayton told the Farmfest audience that he's working to streamline the environmental regulation of agriculture. He said if he's successful, it will help encourage more farmers to expand.
Another governmental issue facing farmers is what may happen with federal farm subsidies. Even before the debt ceiling deal set the stage for major budget cuts, there was talk in Washington about trimming the federal subsidies.
One program singled out by opponents provides what's called direct payments that subsidize farmers -- even when prices are high and farmers are making good profits. At Farmfest, though, some farmers thought it would be a good idea to end that program.
Mark Loewen, who farms near Mountain Lake, was one of them.
"In view of the budget things, I think we need to do away with direct payments right now," Loewen said. "We don't need them, and we don't have the money."
Loewen said there should be some sort of safety net for farmers, but he said crop insurance is probably a better way to go.
Farm subsidies are expected to be cut when the House-Senate budget committee makes its recommendations this fall on where federal spending should be reduced.