August 21, 2019

Wet spring creates ongoing hardship for farmers - Daily Leader Extra : Top Stories

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Wet spring creates ongoing hardship for farmers

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Posted: Tuesday, May 21, 2019 3:18 pm

Terry Schultz, CEO of Mustang Seeds, was in the pews at St. Peter on the Prairie on Friday morning, as was Kevin Jaspers, financial officer with Farm Credit Services of America.

Both work with area farmers and are aware of the stress affecting them. Both took time to attend a worship service organized by The Rev. Constanze Hagmaier and The Rev. Dirk Hagmaier to offer support and encouragement to those farmers.

"A lot of us are concerned about the difficulties in our rural communities," organic farmer Charlie Johnson said prior to the service.

Following three years of low commodity prices, area farmers have endured a harsh winter, a string of blizzards and storms throughout the spring, extended power outages, damaged roads, difficulty in calving and delays in field planting.

"Most of the local producers are struggling to find dry spots to plant their seed corn in," Schultz said.

Farmers in their 70s are saying this is the worst year they've seen, worse than 1993, which was the previous benchmark, he said. Last summer was wet, the fall was wet and the area received higher than average snowfall over the winter. This spring has continued that trend.

"Not only has there been an overabundance of rain, there's also been some extremely cold weather," Johnson said.

Seed corn needs a little warmth to germinate. With the cold temperatures and the wet soil conditions, seed that is planted could as easily rot as grow.

With fields too wet to plant, a May 25 crop insurance deadline on corn in Lake County quickly approaching and more rain in the forecast, farmers are considering their options. Some have begun to order cover crops that can be planted as late as early July, according to Schultz.

This has the benefit of bringing nutrients to the soil for next year's crops, and it can have some feed value because those fields can be hayed or grazed after Nov. 1. However, that option is just making the best of a bad situation.

"It won't cover all their costs for the year, so there will be a financial burden," Schultz said.

Another option is prevented planting crop insurance, according to Jaspers. That will only pay a fraction of what a decent crop might bring, but it could generate enough revenue for land payments or machinery payments.

"You still have to figure out how to live," Jaspers said.

That was a refrain that he returned to several times. He talked about tools that lenders have to help farmers through difficult times.

"Even with the risk management tools, a lot of them are going to have to figure out how to live," Jaspers said.

He talked about federal programs, which cover production losses but not other farm expenses such as depreciation on farm equipment or living expenses.

"The best case scenario is that they will break even," he indicated. In most cases, he said, farmers will go backward.

Currently, Jaspers is encouraging farmers to keep the lines of communication open with their lenders. Options such as payment deferrals and restructuring are available. However, lenders have to help farmers be realistic, too.

"We can restructure stuff, but it has to be the operation can still sustain itself when we return to normal," Jaspers said.

Sometimes, the only way to get ahead of a bad situation is to sell 80 acres or a quarter, he indicated. That's not an option a lender likes to recommend, but it's sometimes necessary to salvage what farmers have worked to achieve.

"Look at how long people have worked to get some equity in their land," Jaspers said, explaining why that recommendation is difficult to make.

Schultz said the poor planting conditions are widespread. He recently traveled to Gibson City, Ill., to check out his company's research station there.

"Most of the ground was not being planted," he reported.

The same was true of adjoining Indiana. Some planting is occurring in Iowa, though, according to Schultz.

The decisions farmers make will affect other ag-related industries, too, he noted. For example, if farmers choose not to plant corn, businesses relying on corn will feel the impact.

"Processors will have to source grain from farther," Schultz said.

Dakota Ethanol, LLC, is a major local processor, using approximately 17 million bushels of corn annually. When the $13.6-million-dollar expansion goes online, the plant will require an additional 14 million bushels, CEO Scott Mundt indicated last year.

"Every business a farmer touches will experience a negative effect," Schultz said.

For farmers, the challenges they face this spring are deeply personal as well as financial.

Johnson, who has been farming since 1981, said, "We're all genetically wired to be farmers, to put seed in the ground."

Watching conditions improve until fields are on the verge of being tillable only to have another storm move in is difficult. Watching the normal planting season slip relentlessly by is difficult.

"This is the first time in my farm career I've not operated a tractor in the month of May," Johnson said.

Jaspers said that in working with farmers, he tries to be optimistic and encouraging.

"Don't hold it inside," he tells them. "Don't feel like you're a failure."

He also encourages community members to have empathy for farmers who live in the area, for pragmatic reasons if for none other.

"You have to remember what runs the community of Madison," he said. "Without the health and well-being of farmers, Main Street businesses are going to suffer."

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