Sen. Kit Bond told a Senate committee today that the House cap-and-trade energy legislation would cost "the average Missouri farmer an additional $11,000 a year in 2020," according to a statement issued by his office.

   The figure, though, appears to wildly overestimate the average cost per farm in the state.

   It's based on a study by MU's Food and Agricultural Policy Research Institute, known as FAPRI.  The study (attached below) found costs would go up by $11,649 annually for a "representative" 1,900-acre farm in Lafayette County, Mo. if the House cap-and-trade bill becomes law, increasing to $30,152 by 2050.

   Bond used those figures in his statement.

   But most Missouri farms are nowhere near 1,900 acres.  In fact, the USDA says, more than 87 percent of Missouri farms are 500 acres or less.  Less than 4 percent are between 1,000 and 2,000 acres.

   The average Missouri farm, in 2007: 269 acres.

   So let's do some math.

   $11,649 in added costs, divided by 1,900 acres comes to about $6.13 per acre.  Multiply that by the average Missouri farm -- 269 acres -- and the average annual impact for Missouri farmers comes to  $1,648.97, or about $137 a month.

   Bond's estimate is seven times higher.

   Now that may still be a pretty hefty increase, given that revenue from a 269-acre farm would likely be relatively low.

   (UPDATE:  But not that low.  The average corn yield in Missouri in 2008 was 144 bushels per acre; at the current price of $3.43 a bushel, that's revenue -- not profit, but revenue -- of $493.92 per acre.  From that, then, the additional $6.13 in energy costs would be deducted.

  We do want to be a bit careful.  The study of the 1,900 acre farm includes a mix of crops, not just corn.  The study suggests costs would go up $10.03 per acre for a 100 percent dry land corn farm.

   Total operating costs, the study estimates, would be $324 per acre for corn in 2020.  With prices at $494 per acre, the profit is $170 an acre -- about a $45,730 profit for a 269-acre operation, even with the added cap and trade costs.)

   But the cost isn't close to what Bond claims in his release: "We see that the cash cow climate supporters are trying to sell us is really a pig in a poke – an $11,000 rising to $30,000 per farm (emphasis added) cat in the bag that this FAPRI study has just let out."

  By the way, most of the added cost comes in fertilizer expenses. 

  And the cost estimate for some farms is much lower in the study.  Costs would go up $4,903 for an 800-acre farm in Carroll Co., for example.

  The study does not take into account other possible changes in some farm expenses, nor income from selling credits or taking other actions to reduce pollution.

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