Farm prices are topic of ad committee meeting

This article submitted by Jan Dalen, Sauk Centre Herald reporter on 9/1/98.

Crop, livestock and dairy prices at todayís low levels are causing even the most efficient farmer to leave a business many have grown up in.

ďThe farmer is an endangered species,Ē Dick Oeltjen told members of the Minnesota House Committee on Agriculture while a crowd of over 200 listened Thursday at a Farm Crisis meeting at the Hayloft in Sauk Centre.

ďAgriculture needs a long-range plan, not a quick fix,Ē said this member of the Minnesota Corn Growers Association, noting there are no 25-to-35-year-old farmers in Pope County.

Farmers from throughout the state gathered at the hearing in Sauk Centre to provide the committee, chaired by Rep. Stephen Wenzel (DFL-Little Falls), with testimony concerning the Farm Crisis of 1998.

The purpose of the meeting was to listen to farmers, to understand the problems theyíre facing in the state of Minnesota and throughout the Midwest, as well as to find out what redemptive action can be taken in the next state legislative session.

Farmers in Minnesota are facing a 1998 growing season tormented by wheat scab and natural disasters, including tornadoes, hail, floods and drought. But they are also facing a less visible but equally devastating crisis as they watch prices sag to the lowest levels experienced since the 1980s farm crisis and in some cases since World War II.

Pat DuBois, chairman of the board at 1st State Bank in Sauk Centre, testified to the parallels between the 1980s and current times. As chairman of the Grass Roots Agricultural Policy Commission during 1984, DuBois noted farm commodity prices for September 1983 included wheat at $3.42/bushel, corn at $3/bushel and soybeans at $6.03/bushel. He stated current county prices for wheat are at $2.61/bushel, corn at $1.53/bushel and soybeans at $4.54/bushel.

DuBois added the 1996 Freedom to Farm Act took away the safety net to support prices for commodities.

A related problem of crop storage is developing as farmers wait for better prices; however, Buck Humphrey, Farm Credit Services, expects to see two to four more years of depressed prices. Several participants at the meeting felt having a floor for prices may be a part of the solution to avoid further declines.

Another concern expressed frequently throughout the afternoon was the increased competition from foreign countries due to NAFTA, especially from Canada and Mexico. A farmer from northwestern Minnesota was disheartened seeing truck after truck coming from Canada with exports through an area of the state now suffering severe economic strain.

Jeff Kunstleben, president of the Minnesota Dairy Producers Board and a dairy farmer from Albany, pointed out the need to educate farmers more on the complex component pricing methods as well as marketing strategies to have more direct control of marketing milk products.

Kunstleben stated between 1980 and 1997, the farmerís share of the consumer dollar for milk products shrank from 37 percent to 23 percent while the marketing share increased from 63 percent to 77 percent. He reported three dairy farmers quit each day.

ďI think we all have thought to quit. Why work so hard, for so little, for so long?Ē he asked. ďI came back from corporate America because I love what I do.Ē

Many farm families are leaving farms to supplement their unstable farm income with nonfarm employment, and a growing number are leaving the farm for good. Mike Bushard, owner of Modern Farm Equipment in Sauk Centre, stated that up to 1,000 head of livestock leave Stearns County and the state on a weekly basis

ďMy number one competitor is not another business or dealer, itís the auction,Ē said Bushard.

Those who remain continue to fall behind due to increasing debt and, in some cases, looming bankruptcy. Delores Swoboda, Groundswell board member, receives eight to 16 calls a day from farmers seeking assistance. Dr. Kent Olson, University of Minnesota College of Agriculture researcher, reported the debt to asset ratio for farmers increased from 48 percent in 1997 to 53 percent in 1998 and accrued farm income is expected to drop over 200 percent in 1998. His projections showed the net income of a typical farmer will drop from a $40,000 gain in 1997 to a $42,000 loss in 1998.

Finding a solution to the immense problem in Minnesota agricultural base for the short and long term while addressing the diverse specific needs and concerns of each region commodity will not be easy. The agricultural economy is complex and an impact felt in one sector is felt throughout the industry.

Some potential parts of the solution may include tax and loan relief, improving crop insurance and developing price supports.

Several witnesses agreed itís important that the general public and the. Federal government become more aware of the extent of the crisis. Farmers are a vital part of rural economy. If the farmer goes, schools and churches close, businesses shut down and whole communities are at risk.

DuBois summed it up, ďThe problem is more serious than most are awareÖIt affects us all.Ē

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