WATERLOO, Iowa --- Direct commodity payments used to be like steak and potatoes. Farmers, at times, relied on the money to survive.
Now, they're simply dessert.
The payments aren't necessarily needed when grain prices are profitable, farmers say, but they aren't turned down when they're offered.
However, the taxpayer-supplied helpings may soon disappear.
When the 2012 farm bill is written, agriculture experts and politicians say, direct payments for corn, soybeans and other crops probably won't be included -- at least in their current form. Record grain prices and deficit spending will see to that.
The national debt is a hot topic in Washington, D.C., these days. Federal lawmakers are discussing ways to reduce this year's budget deficit, which is expected to hit a record $1.65 trillion. The national debt topped $14 trillion in December.
At the same time, grain farmers are enjoying record profits. Producers nationwide received about $5 billion in 2009 -- about the same amount each year since 2004 - just for growing eligible crops.
That makes agriculture an easy cost-saving target.
"There's no sacred cows anymore," Sen. Charles Grassley said last week during a conference call with Iowa agriculture reporters. "The bottom line is ag should be cut like everything else, but no more than anything else. I think direct payments will be done away with."
Direct payments started in 2002. Farmers are paid a certain amount per bushel or pound, depending on the crop. It's one of several farm subsidies meant to supplement farmers' incomes when prices are low.
Corn and soybeans are the main cash crops in Iowa. Currently, farmers get 28 cents per bushel for corn and 44 cents for soybeans. Payments are based on 83.3 percent of a farmer's acres and average yields.
On average, Iowa State University experts say, farmers receive about $29 per acre for direct corn payments and $14 per acre for beans.
In Iowa, that totaled almost $473 million in 2009. Black Hawk County farmers collected about $5.7 million.
Chad Hart, ISU's grain economist, said grain is extremely profitable now, adding that farm subsidies are an inviting target for budget-cutting politicians.
Hart expects a significant chunk of the $5 billion in direct payments will be used to reduce the debt and the rest will be split between other revenue or crop insurance programs.
"(Congress) won't keep direct payments as they are today," he said. "The issue with direct payments is nobody minds them when prices are low."
Farmers are planting - if the weather and other forces of nature cooperate -- what's expected to be one of the most profitable crops in history.
September corn and soybeans on the Chicago Board of Trade were selling for $6.94 and $13.36 per bushel, respectively, Thursday. Both were $3 to $4 per bushel above ISU cost of production estimates. Some analysts are speculating that corn could reach $8 and soybeans $16 by the end of the year. Any disruption in the corn crop could push its price as high as $10.
The U.S. Department of Agriculture forecasts net farm income this year will be $94.7 billion nationwide, about 20 percent higher than last year. It's the second-highest inflation-adjusted value recorded in 35 years.
Once the current farm bill ends, Waterloo corn and soybean grower Dale Rousselow said he expects direct payments will vanish, as well.
Although Rousselow -- who farms with brothers David and Scott -- collected $39,999 in direct payments in 2009, he said he wasn't a fan of the subsidies.
"Right now we probably don't need them," Rousselow said. "I'd just a soon do away with them since they're just (inflating) land prices anyway."
At one time, direct payments served a purpose. There have been several years when cost of production has exceeded grain prices, and direct payments helped pay bills and living expenses. In 2009, for example, government and ISU data show grain production was a losing proposition for most farmers to the tune of 30 to 75 cents per bushel.
During boon times like now, ISU farm experts say direct payments are bid into land rents or purchases.
"Many don't realize (that). Politically, it could be a real battle to keep direct payments," Kelvin Leibold said.
The leader of the state's largest farm organization said two things need to happen: Reduce the deficit and provide an income safety net for producers.
Iowa Farm Bureau Federation President Craig Lang said farmers can't justify direct payments at this time.
Lang, a dairy farmer near Brooklyn, ultimately believes subsidies will be reduced but not totally eliminated.
"Food security is such an issue, the government won't totally get out of farming," he said.
Last week, President Barack Obama unveiled a plan to cut the debt by $4 trillion in 12 years. The Republican head of the House Budget Committee proposed cutting agriculture subsidies by $30 billion in the next decade.
Rep. Bruce Braley of Waterloo takes a guarded approach when it come to direct payments. The Courier, via email, asked the legislator if direct payments will survive.
"Our country needs to maintain a stable food supply, and that includes having a strong safety net for Iowa farmers," Braley responded. "Of course, we need to make sure that our policies are fiscally responsible and that payments go only to those who need them and are supposed to receive them, and I look forward to working closely with Iowa farmers as we move forward on the 2012 farm bill."