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October 20, 1999
Local farm economy not entirely bad newsHigh yieldsbenefit farmersin tough yearBy TONY ZIEBOL Journal Staff Writer BROWN COUNTY -- Prices are low and problems abound in agriculture this year, but according to Wayne Schoper of the Brown County Extension Service, it's too early for area farmers to panic. "Everything isn't going to hell in a handbasket," Schoper said. "But it's going to be a tough year." Despite the low prices for corn and soybeans, Schoper said farmers have had very good yields this year, are at least 10 days ahead of schedule for the fall harvest, and didn't have to dry as much grain as they usually do. Tim Waibel of Courtland is one of those farmers benefitting from good crops this year, which balanced the poor prices. "Actually, considering the yields we've been having, we're doing fairly well," said Waibel who grows corn, soybeans and raises 15,000 pigs. "We've been blessed with the volume this year." Waibel said that because of the prices some countries might be able to purchase some American crops that they wouldn't be able to afford otherwise. All of these positives have helped ease concern over this year's crop. Another good sign is that the top 20 percent of area farmers are still prospering. These are farmers that have a good marketing scheme, have their debt under control and haven't expanded too fast. "Even in years like this, they'll make money," Schoper said. "It used to be everyone was in the same boat." Many of the farmers not in the upper echelon of profits will still be OK, as well. They will be able to pay back their debts, but not make much money, Schoper said. However, Schoper still believes some farmers will go out of business this year, but he said people in this part of the state have it better off than in others, particularity in northern parts Minnesota where farmers have severe problems. The biggest problem farmers are facing is that crop prices are below cost of production. Four major factors are contributing to this dilemma. The first is called the "Asian Crisis." Countries throughout Asia used to be big consumers of American crops, but the market has dwindled. "I foresee it coming back (in the near future)," Schoper said. Because the European market won't purchase American crops that involve Genetically Modified Organisms, it has caused further losses in this country's crop exports. Schoper said the reason for this refusal to buy GMOs is politically motivated and will eventually change. "In five years, it will be old news," he said. "They are very safe to use." A third problem is overproduction. Trade sanctions and embargoes, which have prevented countries from buying from the U.S. market, have caused American crops to be more abundant than demand. "That was really stupid using food as a weapon," Schoper said. "The (U.S.) government has been very detrimental to agriculture." Lastly, the fourth major cause of this farm crisis, according to Schoper, is the emergence of other nations such as Brazil, Australia and Argentina as competitors in the world crop market. "We've got some stiff competition right now," he said. "I hate to wish ill will on your neighbor. But we're truly in a world market." The result of these contributing factors has been that corn prices have caused farmers to lose money in seven of the last ten years and are currently at about $1.45 per bushel. "We're near historic lows," Schoper said. Soybean prices are also extremely low right now (about $4.25 per bushel) and small hog farmers without contracts are going out of business. Waibel said contracts can either work for or against you, but having them has helped him not to be affected by low hog prices this year. "I know a lot of people that it really hurt (not having contracts)," Waibel said. On the positive side, hay prices have been fairly good, the beef industry is generally OK and the approximately 125 dairy farmers in Brown County are doing moderately well. "No one (in area dairies) is a millionaire, but they're doing OK," Schoper said. "They're able to turn a profit." As far as crop prices go, Schoper expects the situation to improve. "Personally, I predict a raise in six to eight months in major commodities," he said. Schoper's advice to farmers is to get a strong marketing plan and not give up. "Remain optimistic and we'll see what's going to happen in the year 2000," he said. "Times are tight, but it's not a disaster at this time. It's kind of a slide-by year." Changes are on the horizon, however, and Schoper expects further changes in agriculture in the coming years. Land prices continue to rise, and most farmers won't be able to afford to purchase more land. "Maybe in this day and age, we'll have to look at renting (land) more," Schoper said. Other changes might include farmers taking a second job away from the farm and less new equipment purchases, which means companies selling farm equipment will have to react by doing more repair work. Cities and townships located in or near rural areas will also be affected because farmers will have less purchasing power. Corporate farms will continue to grow and family farms, unfortunately, will continue to diminish. Alternative crops will be looked at more heavily in future years if farmers continue to struggle with low prices of their major crops. Despite the poor farming economy this year, Schoper said farms will always be important in this area. "We're hanging in there," he said. "We just have to learn from this year and move on."
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