Every time Wilferd (Wiff) Wardin does things right, which happens almost every day, another shock wave hits Washington.
Wardin, in fact, has done things right for so long that he's become what the experts in the government call "a part of the problem" of the growing federal budget deficit.
With his partner/brother and three sons, Wardin, 55, farms on 900 acres of flat, rich land here in Saginaw County. The Wardins grow corn like champions: averaging more than 130 bushels to the acre. They keep a larger than average dairy herd, milking 150 cows every day and, astonishingly, producing nearly 19,000 pounds of milk per cow each year. (The average U.S. cow turned out 12,316 pounds in 1982.)
By any calculation, those are enviable yields. But it is just such heavy production of basic commodities, from milk to wheat to corn, that has pushed market prices down and put enormous pressure on the Department of Agriculture to provide loans to help keep farmers afloat.
And the Reagan administration, projecting the cost of farm-support programs at a record $21 billion this year, is entangled in a hectic debate with Congress over the Wardins of the nation.
The White House is pushing Congress, with little success, to start cutting back by freezing at current levels the "target-price" payments farmers are given to make up the difference between market prices and costs. A freeze, according to the USDA, would save $369 million from an anticipated target-price cost of $3 billion next year.
And, with the government facing another $2 billion outlay this year just to buy farmers' surplus dry milk, butter and cheese, Congress is under pressure to revise the dairy price-support program. The legislators are moving toward reducing support rates and paying the Wardins and other dairy farmers not to produce milk, an action that would be cheaper than buying milk as surplus.
Like most other dairy farmers, the Wardins grow the corn they feed their cows. But they grow more corn than they can use, and now the government, under its payment-in-kind (PIK) program, is giving them surplus corn so they won't grow more. The idea is to deplete surpluses, raise prices and help the farm economy while avoiding more federal budget outlays.
Here is where the whole thing gets curious: the Wardins put half their 320-acre corn base in the PIK program. That means they won't plant 160 acres and, based on their anticipated yields, they will be given 10,412 bushels of corn. At $3 a bushel their PIK benefit would be worth $31,236--a sizable chunk of federal largess.
"Yes, I feel a little funny taking that PIK corn," Wardin said, "but we were in the federal land set-aside programs in the 1960s. The big advantage we will get from the PIK is that we won't have the production expenses of growing on 160 acres."
Yet the Wardins, like many other farmers, are hedging their bet in the hope that they can cash in on the higher market prices that PIK is expected to generate for corn. They rented 34 more acres this year and put it in corn.
A look at the Wardins' operation and the dairy picture in Michigan, the sixth-largest U.S. dairy state, reflects what has happened nationally. Federal program costs are off the charts, and government warehouses are jammed with more than 3 billion pounds of surplus dairy products.
"I admit the federal milk support price went up too fast in the late 1970s, when they put in the semi-annual adjustment," Wardin said. "So now you can produce surplus milk and make money at it. But low grain prices contribute most to the dairy surplus. It's easier to sell your corn as milk than as corn when the price is down."
The Wardins have gotten ahead of the game in another way. Their cows today are simply better producers, averaging almost 4,000 more pounds of milk per year than their cows did a decade ago. In 55 years of grandfather-son-grandson farming on this place the Wardin herd's butterfat production has doubled.
The attractive dairy support price, now at $13.10 per 100 pounds, has encouraged farmers to keep up steady production and has drawn others into the business, adding to the glut.
"I just don't feel for the guys who were laid off of industrial jobs--and there were a lot of them--and then went out and got 25 or 30 cows," Wardin said.
Figures recently released by the USDA underline these phenomena: March through May milk production was 2.3 percent ahead of last year; May was the 49th consecutive month of increased production; there were 51,000 more milk cows in March than a year earlier.
Similar things were occurring in Michigan. There were 10 more dairy producers (6,419) in April, compared with a year earlier; average daily shipments were up 101 pounds (to 2,106); average monthly gross income per farm was up about $100 (to $8,622).
"Even if they cut $1 off the federal support price, it won't reduce the surplus," Wardin said. "We can go down another $2 or $2.50 per hundredweight and stay alive. The big guys will survive. But if you ended the program or cut it abruptly it would knock out a lot of young farmers and the heavily endebted. That's what worries us."