Farm­ers face chal­lenges with har­vest

Many see po­ten­tial prof­its fall due to dam­aged crops

Milwaukee Journal Sentinel - - BUSINESS - RICK BAR­RETT

Weeks from the fall har­vest, farm­ers are keep­ing an eye on the weather and their fi­nances in what has been a tough year for many folks in ru­ral Wis­con­sin.

The price dairy farm­ers re­ceive for their milk has been low for months, and prices for corn and soy­beans are ex­pected to hover near the breakeven point at har­vest time.

Mostly, the crops look good in the fields. But farm­ers got a late start plant­ing this spring, and some ar­eas were hit hard by flood­ing and weeks of too much rain.

“It’s been a year of chal­lenges,” said Jack Her­ricks, a dairy farmer from Mon­roe County.

On July 20, a ma­jor storm flooded his milk­ing par­lor and stripped top soil off his fields.

In­clud­ing crop losses, spring and sum­mer floods cre­ated an ex­pen­sive mess for many farm­ers who had parts of their fields look­ing more like lakes than crop­land.

“But I have since come to re­al­ize it was pretty mi­nor com­pared with what peo­ple have en­dured from the hur­ri­canes,” Her­ricks said.

“I think about how for­tu­nate we are to be re­silient,” he added.

To some de­gree, farm­ers are op­ti­mists. In the spring, they bor­row money to plant crops, and in the fall, they hope the har­vest is good enough to cover the loan and make a profit.

Their liveli­hood de­pends on the weather, com­mod­ity prices and other things mostly out of their con­trol.

Even with plan­ning and hard work, their in­come doesn’t al­ways cover the costs of run­ning a farm.

“That sce­nario is some­what stress­ful, and it wears on your op­ti­mism. But as a group we carry on,” said Jim Holte, pres­i­dent of Wis­con­sin Farm Bureau Fed­er­a­tion and a farmer from Dunn County.

Lower com­mod­ity

prices in Au­gust had a neg­a­tive ef­fect on how farm­ers felt about their fi­nances, ac­cord­ing to the Pur­due-CME Group Ag Econ­omy Barom­e­ter.

The mea­sure­ment of farmer sen­ti­ment slipped to 132, down 7 points from July but stronger than the year-ago level of 96. A read­ing over 100 in­di­cates op­ti­mism while be­low that in­di­cates pes­simism.

“Peo­ple feel bet­ter about things now than they did a year ago, but they’re still pretty con­cerned,” said Jim Min­tert, di­rec­tor of Pur­due Univer­sity’s Cen­ter for Com­mer­cial Agri­cul­ture.

Grain-pro­duc­ing states had bumper crops last fall, which helped live­stock farm­ers with their feed costs but pushed down prices on com­modi­ties mar­kets.

This fall’s har­vest prob­a­bly won’t be as ro­bust, but it’s not go­ing to be bad, ac­cord­ing to es­ti­mates.

For now, a rally in corn and soy­bean prices doesn’t ap­pear likely, Min­tert said.

Dairy farm­ers are at a cross­roads. While there’s still a glut of milk on the mar­ket, and milk prices re­main weak, de­mand for dairy prod­ucts picks up in the fall and con­tin­ues through the hol­i­day sea­son.

Nor­mally, in­creased de­mand raises prices for farm­ers as milk sup­plies tighten.

“This is our big con­sump­tion pe­riod, with lots of de­mand for but­ter, cheese and cream-based prod­ucts,” said Mike North, pres­i­dent of the Dairy Busi­ness As­so­ci­a­tion based in Green Bay.

How­ever milk prices are barely above the break-even point for many farms.

“As we go for­ward, ev­ery­body is hope­ful that the normal sea­son­al­ity comes back to the mar­ket and we see a lit­tle bit of a re­bound in prices. But even if we do, prices have not been spec­tac­u­lar,” North said.

“They’ve al­lowed a farmer to es­sen­tially sur­vive and eek by, hop­ing and wait­ing for some­thing bet­ter,” he added.

A large amount of milk com­ing to Wis­con­sin dairy pro­cess­ing plants from Michi­gan has made the over-sup­ply prob­lem here worse.

“Every time I see an­other Michi­gan milk truck, I want to shake my fist out the win­dow,” said John Peck, ex­ec­u­tive di­rec­tor of Fam­ily Farm De­fend­ers, a Madi­son-based farm group.

Farm­ers pro­duc­ing or­ganic milk, meat, poul­try and crops are strug­gling, too, even as nor­mally those prod­ucts com­mand a higher price.

A lot of fake or­ganic food is be­ing dumped on the U.S. mar­ket from over­seas, ac­cord­ing to Peck.

“If the U.S. Depart­ment of Agri­cul­ture doesn’t start en­forc­ing or­ganic stan­dards, then Amer­i­can or­ganic farms are go­ing to get wiped out,” he said.

The farm econ­omy has proven to be re­silient, given the beat­ings it has taken over the years from in­clement weather and the mar­ket­place.

“I like to think that the farmer is the eter­nal op­ti­mist be­cause in these mo­ments we still have to main­tain the hope that bet­ter times are ahead,” North said.

Each dol­lar of net farm in­come re­sults in an ad­di­tional 60 cents of eco­nomic ac­tiv­ity as farm­ers spend their money lo­cally and across the state, ac­cord­ing to Univer­sity of Wis­con­sin re­search.

That trans­lates to hun­dreds of mil­lions of dol­lars for the ru­ral econ­omy and ur­ban cen­ters as well, since most items that farm­ers pur­chase come from other places.

Her­ricks’ farm is fourth-gen­er­a­tion and fam­ily-owned. It sup­ports 14 peo­ple in­clud­ing non­fam­ily employees.

What con­cerns him the most, Her­ricks said, are changes in agri­cul­ture that could have a longterm detri­men­tal ef­fect on his fam­ily and employees.

“Farm­ing is a gen­er­a­tional busi­ness. We need to look at things very longterm, and my hope is the fol­low­ing gen­er­a­tion can build on the suc­cesses of the present gen­er­a­tion,” Her­ricks said.

“That is what it’s go­ing to take for our farm to sur­vive,” he added.

Fall is an ex­pen­sive time of the year for farm­ers as they har­vest crops and pre­pare for win­ter and next spring.

With flat or slightly im­proved in­come this year, farm­ers aren’t likely to be in the mood for big pur­chases un­less it’s some­thing they need right away.

Many are hav­ing dif­fi­cul­ties cov­er­ing their bills and day-to-day op­er­a­tion costs, said Re­nee Schaal, whose farm in Burlington milks 300 cows and raises 600 acres of crops.

Schaal is also a crop in­sur­ance agent cov­er­ing Racine, Kenosha and Wal­worth coun­ties. She es­ti­mates be­tween 5% and 10% of the crops in her area were lost to floods.

“Right now there’s a lit­tle wait­ing stretch un­til har­vest, un­til we see what kind of crop we have in the fields. But we need prices to move up and help farms be prof­itable. Farm­ers need to make some money so they can con­tinue to stay in busi­ness and keep agri­cul­ture go­ing strong,” Schaal said.




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