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 break-even 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 non-family employees.
What concerns him the most, Herricks said, are changes in agriculture that could have a long-term detrimental effect on his family and employees.
«Farming is a generational business. We need to look at things very long-term, 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.
Source: Milwaukee Journal Sentinel
Link: http://www.jsonline.com/story/money/business/2017/09/16/wisconsin-farmers-gear-up-fall-harvest-challenging-year/669603001/