has seen worse times in this country than today.
The Dust Bowl drought of the 1920s eroded farmland and helped lead to the Great Depression. The farm crisis of the 1980s resulted in a then-record number of farm foreclosures. Southwest Wisconsin farmers endured a three-year drought in the late 1980s.
That does not mean the situation in agriculture today is good by any measure. The combination of low commodity prices, irregular weather, trade disruptions and changes in the industry make this, by some observers’ definition, a crisis.
UW–Platteville hosted Struggles in Farm Country, a panel discussion on the farm economy, Thursday as part of WisBusiness.com’s Navigating the New Economy series.
“A lot of farmers are just looking to get this year over with,” said Paul Mitchell, director of the Renk Agribusiness Institute. “It’s been a bad year.”
But Mitchell, who said he grew up during the 1980s farm crisis, added, “I’m not ready to call it a crisis yet, but it’s not good. … It’s not like every farmer is struggling, but a lot of farms are struggling.”
“The damage that’s been done didn’t happen overnight,” said moderator and farm journalist Pam Jahnke of the state’s farms, 95 percent of which are family owned. “The recovery won’t happen overnight.”
“Three, four, years of really tight markets … all the liquid capital, the working capital, is gone, and we’re dipping into equity,” said Mitchell, who said 45 dairy farms have closed since June, while adding, “they’re just a big symptom. A lot of farmers are getting out before it gets bad. … There’s no good crop to go grow.
“A lot of people are desperate for a quick and easy answer, and I don’t think there’s a quick and easy answer.’
UW–Platteville chancellor Dennis Shields, who grew up in farm country in Iowa, termed today full of “unprecedented challenges, ad we hope people view UW–Platteville as part of the solution for these struggles,” including the Dairy Innovation Hub in development.
A large part of ag turbulence has to do with the currently turbulent trade relationship between the U.S. and China, which veers between threats of new tariffs and agreements to buy U.S. crops.
On the one hand, Brad Pfaff, secretary-designate of the state Department of Agriculture, Trade and Consumer Protection, said ag exports exceeded $1.6 billion the first six months of this year. That, however, is 2 percent less than one year ago.
“The value chain and the supply chain are in place … to people and consumers around the world,” he said.
UW–Madison emeritus Prof. Charles Irish said annual trade between China and U.S., which totaled $29 billion six years ago, has dropped to less than $10 billion, due in part to the Trump administration’s so-called trade war, but for other reasons as well, including the African swine flu that has dampened demand for pork in China and the Asian economic slowdown.
“The Chinese don’t trust what the Chinese government says,” he said. “Trump is holding a card in the form of 15-percent tariffs on an additional $156 billion in Chinese imports, and the date is Dec. 15. The Chinese are saying we’ve got a way to go before making really significant additional purchases in ag.”
Other countries are taking up the trade slack with China, including Brazil, Irish said.
An issue between the U.S. and China that goes beyond ag is protection of intellectual property, or lack thereof, in China, not because of a lack of laws, but because of a lack of enforcement.
Irish predicted China would stiffen intellectual property protection “when China realizes it’s in their economic self-interest to make protections of intellectual property.”
On the other hand, Irish sees growing opportunities elsewhere in Asia, including Japan and South Korea, as well as Southeast Asia, including Vietnam.
He said those countries are “a place of significant growing affluence, so it probably is worth your while to pay attention.”
The trade war between the U.S. and China is actually not a recent development.
“This is something that is 150 years in the making, and China is going to become preeminent in the world” according to mainstream Chinese opinion, he said. “The issues that Trump is arguing about, they’re been a problem for quite some time.
“The stakes are so high on both sides, they will declare victory and they will walk away without much changing.”
Even though exports are a major part of Wisconsin ag, most Wisconsin farmers and ag businesses don’t export what they produce, according to Mitchell, or even how many farm products “don’t go to other states. Their commodities are touched by a lot of people in this state.”
Farmers’ problems are more based on how wet Wisconsin now is, with crop harvesting about two weeks behind, he said: “Can you get it out” of the fields.
Corn prices have also been rocked by the Trump administration’s back-and-forth position on the Renewable Fuel Standard and the Environmental Protection Agency’s waivers to refineries over production of ethanol.
“There’s a lot of weather uncertainty this year and there’s a lot of policy uncertainty this year,” said Mitchell. “Trade is just one part of that.”
Another frustration of farmers is politicians’ not understanding their problems.
State Rep. Travis Tranel (R–Cuba City), a Jamestown organic farmer, said only a “handful” of legislators understand that agriculture contributes more than $100 billion to the state’s economy, and that dairy alone comprises 15 percent of the state’s economy.
“There’s a huge disconnect,” he said, adding that legislators started to hear about farm country’s problems during county dairy breakfasts in their districts this past summer. “In 10 to 15 years, their constituent populations are literally going to be generations removed from farms.”
One example Tranel cited is the Water Quality Task Force created by the state Assembly. As a member of the task force Tranel has traveled across the state and heard, “great ideas. A lot of them will never work in the real world.”
Tranel said Concentrated Animal Feeding Operations, which have gotten considerable public criticism, are subject to much more regulation than small farms.
A CAFO, he said, “is probably more environmentally sustainable, but not as healthy in terms of the local economy.”
A related issue is sustainability, the definition of which, Tranel said, “depends on whom you ask.” To farmers it means being able to pay their bills and their children’s ability to stay on the farm, while to consumers it means “probably a completely different answer and quite frankly a completely different mindset.”
There have been efforts to address farmers’ mental health and the stress they’re facing, but, said Tranel, “Their mental health is fine. They can’t pay their bills. That stress is so real, and I think the general public doesn’t understand that.”
Most people don’t understand how personal farms are to their farmers.
“If I’m not paying my bills, that reflects on me,” said Jahnke. “That’s my parents and grandparents.”
One increasingly popular solution for farmers is to get into specialty ag areas. Anna Landmark started Landmark Creamery in Belleville to sell dairy products from sheep.
“We’re kind of where goats were in the ’70s and ’80s, just getting started,” she said.
But government and the ag lending industry don’t always help specialty ag. Landmark said a former government ag program “gave me access to all the consultants I needed” to launch her business for $100. “It was very sad when that program went away,” she said.
Landmark said there are few government programs for “food businesses of my size,” and banks won’t lend to businesses of her size, so “growth is a challenge. I think we could grow much faster if we had access to credit.”
Landmark said it is “almost impossible” for young people to get into agriculture.
“We really need to look at expanding the diversity of the sizes of farms,” she said. “There are people who are really hungry to get into farming.”
Pfaff, a fifth-generation farmer, said the state needs to leverage agriculture and the state’s nearly 60,000 farms, including promoting ag jobs off farms.
“Every one of them is an economic engine,” he said. “You should invest in them” through such programs as the Wisconsin Agricultural Education and Workforce Development Board, created a decade ago. “If you’re farming, you know how to work, you know how to be a mechanic, you know how to communicate with other farmers.
“Let’s hold on to what we’ve got, build on the supply chain, bulid on farmers, build on work ethic, build on our culture.”
“Part of my position is to recruit people into the ag business,” said Mitchell “There are tons of opportunities here.”
That, however, requires teaching students majoring in agricultural business or agricultural economics how the farm economy works.
“People have never been on a farm, but they’re majoring in ag business,” said Mitchell.
Tranel said this country has had a “40- or 50-year focus on how can we grow enough food to feed the whole world. ... We’re very good at producing things. We need to focus on the thing in my mind, which is the health of rural America.
“In my opinion it’s not a crisis, but society is at a crossroads.”
Video of the event can be viewed at https://www.youtube.com/watch?v=qCf2Mh2-nko.