Pandemic breeds tough market for farmers of all kinds


(5/22/2020)

Social distancing during spring planting was no problem on Shane Goplin’s farm. “Everyone is basically sitting in their own cab, whether it be a truck or a tractor,” the Trempealeau County Farm Bureau president explained. The problem is, what reward will local farmers see for all their hard work and investment?

“Given these prices, I don’t know who can be profitable or break even,” Goplin stated.

Since the start of the COVID-19 pandemic in the U.S., agricultural commodity prices have fallen across the board. From February to April, corn, beef cattle, and milk prices all dropped by roughly 20 percent or more, according to U.S. Department of Agriculture (USDA) data. Prices partially rebounded this month, but most are still down significantly from the start of the year.

Livestock farmers have been some of the most hard-hit. As the Post reported last week, local hog farmers were forced to euthanize thousands of animals after the new coronavirus crippled meat packing plants across the Midwest and left farmers with nowhere to go with their animals. Cattle and poultry farmers are facing the same problem. Even small ranchers who sell meat directly to consumers need a licensed facility to slaughter and butcher their animals. “Now it’s really putting a strain on the local markets, where they’re getting flooded with animals and they can’t keep up,” Goplin said of smaller, local meat lockers and slaughterhouses. “They’re all swamped. They’re all booked out to 2021,” Riverland Community College Farm Business Management Instructor Dan Miller echoed.

The closure of restaurants and schools sent dairy demand tumbling and milk prices along with it. “All of a sudden, they didn’t have a market,” Winona County Farm Bureau President Glen Groth said of some local creameries. Some Midwestern dairy farms even had to dump milk. There was one bright spot. “Kwik Trip was a savior,” Groth stated. “They started gobbling up large volumes of milk.” 

Corn is not doing much better. “The corn prices are pretty pitiful right now, and that’s because ethanol demand has dropped so much,” Groth explained. Normally, low oil prices can be good for farmers — it means cheaper diesel fuel for tractors. However, when global price wars and declining travel made oil cheaper than ethanol, corn prices slumped, too.

There are ups and downs in farming, but these pandemic-era declines come after years of challenges for many Midwestern farmers. “’14, ’15, ’16, ’17, ’18, and ’19 have not been good,” Miller said. He recalled one student asking, “You said [commodity prices] were below the cost of production on January 1, and now you’re telling me we’re down another 20-30 percent? How do you expect us to make it?” It was a fair question, Miller said, adding that he worries there could be a repeat of the 1980s farm foreclosure crisis, leaving Southeast Minnesota farms concentrated in the hands of fewer farmers.

However, there is some help on the way from the federal government. Local Farm Service Agency offices are accepting applications for the Coronavirus Food Assistance Program, which offers up to $250,000 in aid for farms that saw a five-percent or greater decline in commodity prices. “It was a reasonably good attempt by the federal government, I think — I mean no one is going to agree on everything,” Miller said. “It’ll make up for some of the losses,” he stated. There are still lots of questions about how this program will work, though, Goplin stated. He added, “I’d much rather get a break-even price and no government programs.”

For farmers having trouble making debt payments, Minnesota lawmakers also passed a new law in response to the pandemic that gives farmers more time for mediation with their lenders and that blocks farm foreclosures through December 1. Land Stewardship Project Policy Organizer Paul Sobocinski advocated for the law and praised its passage, saying it would give farmers a chance to get through this year’s harvest and hopefully turn things around.

What are farmers to do in this situation? “I just try to take my mind off of it,” Goplin said. He is focusing on raising a good crop and watching for an opportunity to sell it at a profit. “Farmers have to be the eternal optimists, hoping that we can get some of the prices to rebound,” Goplin stated.

Miller offered this advice: “Number one, keep your sanity. To keep your sanity, try to focus on the roughly 40 percent of the variables that you can control, because if you are preoccupied with the ones you can’t, you will go nuts.”

“Reach out for help,” Miller continued. From financial issues to coping with stress, there are people farmers can talk with, he said. “Take advantage of these government programs when you can,” Miller added. “Don’t do any big, rash things without a lot of planning, because if you make major switches in enterprises, that’s difficult to do,” Miller advised. At the same time, he said, “If there are opportunities to adjust your business, keep looking for things.”

The Minnesota Farm & Rural Helpline offers a free, confidential, 24/7 hotline for people dealing with stress, anxiety, and depression at 833-600-2670, extension one.

More information on help and resources for Minnesota farmers — including Minnesota Farm Advocates offering free advice for farmers going financial troubles or negotiating with lenders — is available at www.mda.state.mn.us/covid-19-agriculture.

Wisconsin resources for farmers during the pandemic are available at datcp.wi.gov/Pages/News_Media/Covid19.aspx.

More information on the Coronavirus Food Assistance Program can be found at www.fsa.usda.gov.

Chris@winonapost.com

 

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