MPR: A Year of Woe

A Year of Woe
by Mark Steil
December 27, 1999

There are signs that the crisis in agriculture eased a bit the past year but farmers anticipate more tough times in the year 2000. Despite a pledge to end farm subsidies, federal government props in the form of emergency aid appear to be the only thing keeping many Minnesota farmers in business. The political arena will be a major focus for farmers, but they'll also be keeping an eye on the weather.

For more information, see MPR Online's "Trouble on the Farm"section.

AS THE FARM CRISIS enters its third year, the heart of the problem remains the same: low prices. The futility of producing crops that cost more to grow than they bring at sale time is upsetting.

Goedtke: Darn right it is.

Southwest Minnesota farmer Rick Goedtke has found himself making a lot of changes to adapt and survive. He walks with a slight limp as he leads the way into his farmhouse kitchen near Fulda. He hurt a knee playing volleyball. In his late 30s, this 5-foot-10-inch playmaker can still touch the rim on a basketball court. But he says he needs to stretch and warmup for a good half hour to be effective on the court. He can handle that, but in farming it seems no amount of preparation, planning or plain hard work is enough.

Goedtke: We should be rewarded for the labor that we do and it turns out that right now we don't get rewarded at all. It seems like the harder you work almost the further behind you get.

Even though Goedtke says he'll probably lose money on his corn and soybeans this year, he did better on the turkeys he raises. In fact, he says the money he makes on the birds will keep his farm afloat. It's an example of what may be the biggest difference between this year and 1998. Then, every farm product was a price disaster; in 1999, there were a few bright spots. Extension farm specialist Erlin Weness says thanks to better hog and cattle prices, a group of 65 southwest Minnesota farmers he helps with management decisions did much better in 1999.

He's still running the numbers, but Weness says initial indications are the 65 will make much more money than they did last year.

Weness: If you take the average farm in our group who made less than $9,000, I would think its going to be up in that $25,000 - $35,000 range this year.

While that would be a big improvement, its barely enough to support a family. And consider this: the federal government accounts for nearly all of that profit. An average-sized Minnesota farmer probably took home somewhere between $20,000 and $40,000 in federal aid during 1999.

Weness: If you took the government out, agriculture would make exactly zero or a negative figure.

Minnesota farmers got more than $1 billion in federal aid during 1999. While many people, including farmers, debate the wisdom of that type of subsidy, Weness says one thing is clear: without the federal money, thousands of Minnesota farmers would be out of business.

At a September rally on Capitol Hill in Washington, a group of farmers and supporters called on the federal government to do even more for farmers. Exactly what that role should be will be a major issue in 2000. Faced with an election and the likelihood of continued low prices, Indiana Republican Senator Richard Lugar has already predicted Congress will pass a multi-billion-dollar emergency farm-relief package next fall for the third consecutive year.

House Agriculture Committee Chair Larry Combest (R-TX) plans to hold hearings on the price crisis. Specifically the committee will study what changes, if any, to make in the 1996 Freedom to Farm Bill which governs federal agricultural policy. A more grassroots call for change is being lead by Minnesota Senator Paul Wellstone, a Democrat. In a speech earlier this month in North Dakota, Wellstone called on farmers and their supporters to go to Washington.

Wellstone: Before spring planting season, early March? We need to have thousands of people, thousands and thousands of people from rural America in D.C. raising the roof.

Wellstone made a similar call to action last fall but nothing happened. He says this time will be different. Wellstone rode a well-organized grassroots campaign to victory in his first Senate election. He's planning a similar effort for farmers.

Wellstone: We have to put together the resources. We have to get some support. Some organizers have to be hired. And then we bring the people to Washington. Farmers, rural Americans, religious community, urban/metropolitan supporters, environmentalists, labor people, all the supporters we can have.

Recent federal changes in crop insurance had a major effect. In northwest Minnesota this year, heavy rain again washed out thousands of acres of crops. The new crop insurance regulations allowed farmers to collect insurance payments on land too wet to plant. In the past, farmers could only collect on land which was seeded and then flooded out; a small change but an important one, since it means farmer didn't have to spend money on seeds, chemicals and machinery for land which could not support a crop this year.

Pennington County extension agent Howard Person says it's a small but important change because farmers didn't have to spend money on seeds, chemicals and machinery for a crop that had little chance of success.

Person: Those that did get crop in the ground wished they hadn't. Yields were average to poor, prices were very poor and as a general rule those folks who had crop insurance and got prevented planting who didn't turn a wheel came out better than those who did try to plant.

Government's major role in agriculture could grow even larger depending on what happens in Washington this year. There could be a major push to help dairy producers as well. Milk prices dropped to 20-year lows recently and have shown little sign of bouncing back. Many farmers see a great deal of futility in the government efforts because they say spending money on subsidies doesn't address the central problem: farmers are producing too much.

Farmer Rick Goedtke doubts government can pull agriculture out of crisis, but says something else might.

Goedtke: It sounds strange but I think mother nature's gotta do it itself. I think its got to reduce inventories in the world, especially the United States. And when it does than then our grain market is going to come back.

Right now there is concern that dry weather in South America could reduce soybean yields. If that happens, prices will rise and help American farmers with their millions of bushels of beans in storage. Drought also moved into the heart of the Midwest corn belt last fall, including parts of southern Minnesota.

Although it had little impact on yields, Iowa State University extension climatologist Elwynn Taylor says it raises concerns about the upcoming crop year.

Taylor: What we can say right now is that the risk of having a droughty year is twice normal.

Drought is a double-edged sword, creating winners and losers. While a drought could mean big profits on stored grain, it also would mean reduced yields next fall. But for those farmers who manage to slide through with a decent yield while the full weight of dry weathers falls on others, a drought can be the best of times. Full bins and decent prices. It's really a matter of luck. Nothing else much has worked for Minnesota farmers the past three years, so maybe luck is as good a peg as any for them to hang their hopes on.

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