Farm­ers forced to quit as in­come dives

Re­cent trade dis­putes worsen un­cer­tainty over com­mod­ity prices

USA TODAY US Edition - - FRONT PAGE - Rick Bar­rett

MIL­WAU­KEE – Farm in­come this year could be the low­est since 2006, a re­flec­tion of low com­mod­ity prices, ex­port­ing is­sues and in some places, lousy weather.

Na­tion­wide, net farm in­come has fallen by more than half since 2013, and it’s ex­pected to drop an­other 6.7% this year — to the low­est level since 2006, ac­cord­ing to the Depart­ment of Agri­cul­ture.

Farm­ers are fac­ing un­ri­valed in­come volatil­ity, com­ing off high com­mod­ity prices five years ago, the USDA says.

Now, “the prices that farm­ers have been re­ceiv­ing for their prod­ucts aren’t pay­ing the bills, and too many peo­ple are be­ing forced to give up farm­ing,” said Roger Johnson, pres­i­dent of the Na­tional Farm­ers Union.

For ev­ery dol­lar con­sumers spend on food, the farmer re­ceives just 14.8 cents — the low­est “farm share” since the USDA be­gan re­port­ing the fig­ures in

1993, ac­cord­ing to Johnson.

In April, beef pro­duc­ers re­ceived just

22 cents of the re­tail food dol­lar com­pared with 44 cents four years ear­lier, NFU fig­ures showed. Dairy farm­ers re­ceived 30 cents, down from 51 cents in April 2014.

Wheat farm­ers av­er­age just 12 cents on a loaf of bread that re­tails for $3.49.

These fig­ures “strike a chord with fam­ily farm­ers and ranch­ers who are deal­ing with the sharpest de­cline in net farm in­come since the Great De­pres­sion,” Johnson said.

“Most con­sumers do not fully re­al­ize the volatil­ity and risk as­so­ci­ated with farm­ing or the eco­nomic de­spair many fam­ily farm­ers are en­dur­ing,” he added. “How­ever, when you con­sider that what you’re pay­ing at the gro­cery store con­tin­ues to drop, and you see the farm­ers’ share con­tinue to drop, you can imag­ine that it’s hard to earn a de­cent liv­ing in agri­cul­ture right now.”

‘Play­ing in the mud’

Low prices aren’t the only prob­lem. Some farm­ers have seen a tough break when it comes to the weather, such as the flood­ing that has socked parts of Wis­con­sin.

“We are play­ing in the mud,” said Ross Bishop, a beef cat­tle and crops farmer in Washington County, Wis. “I have two-thirds of my corn planted, but prob­a­bly 5 acres of that is un­der wa­ter.”

Bishop said he’s los­ing about $200 for ev­ery steer he raises for slaugh­ter. His prices have fallen be­cause there’s a glut of an­i­mals on the mar­ket, even though con­sumer de­mand for beef re- mains strong.

Many farms, not pre­pared for the sharp and pro­longed down­turn, have folded.

“I knew this was com­ing, so I haven’t bought any­thing new, and I don’t have a lot of debt,” Bishop said.

Some farm econ­o­mists are pre­dict­ing a re­cov­ery in com­mod­ity prices next year or in 2020, es­pe­cially if for­eign trade is­sues are set­tled and global mar­kets be­come more pre­dictable.

But a turn­around also de­pends on the weather and the grow­ing sea­son in the U.S. and other coun­tries that pro­duce mas­sive amounts of corn, soy­beans, other crops, live­stock and dairy prod­ucts.

“Farm­ers have no way of in­flu­enc­ing prices. Their only way of try­ing to in­crease their in­come is to pro­duce more,” Johnson said.

Ex­ports hang in the bal­ance

Trade dis­putes have cre­ated un­cer­tainty, with China can­cel­ing U.S. soy­bean ship­ments and Mex­ico turn­ing to South Amer­ica for soy­beans over con­cerns about the North Amer­i­can Free Trade Agree­ment.

“The trade tit-for-tat could ul­ti­mately end up shut­ting the door on mil­lions of pounds of pork, over 3,000 tons of beef and $14 bil­lion of soy­beans meant to be sold around the world,” Kevin Skunes, pres­i­dent of the Corn Board of the Na­tional Corn Grow­ers As­so­ci­a­tion, wrote in a col­umn.

“The ex­panded list of tar­iffs on ex­ports is mak­ing Amer­ica’s farm­ers the first ca­su­al­ties of the trade war be­tween the U.S. and China. If the U.S. with­draws from NAFTA, there will be se­vere con­se­quences for Amer­ica’s farm­ers, and for our re­gional, na­tional and global economies,” Skunes wrote.

It’s hard to say what’s “nor­mal” in agri­cul­ture, since mar­kets and prices are al­ways chang­ing. Still, many farm­ers have been pum­meled by back-to­back years of fallen prof­its.

It never feels “nor­mal” when you are stuck in a low pe­riod, said Jim Holte, pres­i­dent of Wis­con­sin Farm Bureau Fed­er­a­tion.

USA TO­DAY NET­WORK

Good weather is key to a farmer’s in­come. Colin Johnson, a farmer near Agency, Iowa, strug­gled last year with parched corn crops. But in Wis­con­sin this year, farm­ers have the opposite prob­lem: flood­ing.

USA TO­DAY NET­WORK

PDPW

Some farm econ­o­mists are pre­dict­ing a re­cov­ery in com­mod­ity prices next year or in 2020, es­pe­cially if for­eign trade is­sues are set­tled.

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