COVID-19 just one more worry for state farmers

Dropping milk prices, lack of demand due to pandemic shutdown is cause for concern for agriculture

As the 2020 farming season rolls around, farmers look towards a harsh and turbulent future, as falling market rates and unemployment flood the nation.

“With the prices we’ve been getting, it sure doesn’t feel like we’re essential,” said Ryan Klussendorf, who, together with his wife Cheri, owns and operates Broadlands Grass Farm, a dairy in Medford.

Like many small town farmers, Klussendorf is bracing for a strike against the agriculture market, which he feels will be tremendous in the coming season.

“A lot of dairy commodities are exported in worldwide trade, that’s where most of our prices are based off of, typically not on domestic anymore,” he said. “The markets are very unstable right now. I just looked at milk prices this morning, there’s milk trading for under $13 a hundredweight (cwt).”

The price pales in comparison to the prices dairy producers were getting just a few months ago, when milk per cwt was hovering around $20 at the end of Dec. 2019. Since then, milk prices have steadily seeped downwards.

“Two or three weeks ago it was looking like it was going to be a very profitable year for agriculture in Wisconsin. Now, looking at the break-even cost, and what’s going on with all the other local businesses in the community... it’s not good for anyone,” Klussendorf said.

The financial toll many farms are about to take may be too much, and will likely cause some to crumple. Newer farms are at particular risk, some having been unable to secure a substantial foothold in the industry before the turmoil erupted.

“Last year in Wisconsin we lost 818 dairy farms. I can see, if we don’t get enough help from the federal government, the number probably could surpass that this year,” Klussendorf said, also noting the previously higher price markets followed by the sudden crash caused a ripple affect amongst the farmers, as many were unprepared.

“There are programs in place to help farmers, including insurance, but a lot of people didn’t sign up for them this year because the markets were looking favorable,” he explained. “I urge the federal government to reopen the enrollment period so farmers can get covered, knowing that this could last a long time.”

To aid fledgling farmers, the $2 trillion relief package passed by the Senate in direct response to the COVID-19 pandemic includes billions of dollars in aid for U.S. agriculture. This includes $9.5 billion to be granted directly to producers of livestock and specialty crops, which includes dairy.

The package also contains $14 billion for the Agriculture Department’s Commodity Credit Corporation, which has programs to assist struggling farmers, such as Agriculture Risk Coverage/Price Loss Coverage which acts as a “safety net” for when agriculture prices drop.

The relief funds will ease some of the financial burdens farmers have and help keep the agriculture industry propped up, but Klussendorf isn’t sure it will be enough: “We’re not going to make up the loss in the market from government backing, so we need to make sure this turns around quickly.” Klussendorf expressed concern over what will happen to a farmer’s operation if they become sick, wondering if they’ll be put in a hole of debt.

“If a farmer does become sick, can they still sell the product off their farm? Or is everything quarantined and no one can step foot on your farm?” he postulated. “A lot of farms around here, around Medford and all the small communities, they’re just family. If anybody becomes sick and can’t do their duties, there’s really no one to take over.”

While farms are the most important part of the agriculture industry, Klussendorf pointed out they’re not the only sector that could be hit.

“The other concern is if employees at dairy processing plants get the virus, are those facilities going to have to shut down as well? And then where does the product go that’s coming off the farms? Will we have to dump milk, will we be unable to process beef? These are all unknowns.

“You hear some talk about out east, in the New York and Pennsylvania area, that those types of processing plants have been shut down,” he said, adding that the rumors are unconfirmed.

Amidst the unrest, Klussendorf warns against deceitful businesses that are looking to take advantage of the crises, purposely driving prices of dairy down so they can increase their own profit, while simultaneously harming farmers.

“Right now with the pandemic, problems are magnifi ed and markets are easily manipulated. A lot of our price comes from the Chicago Mercantile Exchange. The price has come down just due to the unknowns of this virus. Now processors throw loads of cheese on it to further drive the price down, and we’re not seeing prices go down in grocery stores for the consumers, so there’s definitely price gouging going on right now. That needs to be addressed.”

As dairy markets continue to choke, verified reports of farmers dumping their product have come from Wisconsin Farm Bureau president Joe Bragger, in an averment released April 2: “It’s with a heavy heart I make this statement. The slight optimism that was floating around at the beginning of the year for our dairy farmers has been buried... With depressed prices the last five years, our farmers were already stressed financially. The confirmed reports of milk dumping and processors asking farmers to cut back their production has only amplifi ed the pressure.”

He expressed the magnitude of the impact COVID-19 is having on the economy, and said that those in the agriculture industry need to stand in solidarity during these arduous times.

“Dumping milk is not an easy thing to wrap your head around,” Bragger said. “During this time the best thing we can do is communicate with those around us. I encourage you to reach out to your vendors, processors, suppliers and other stakeholders to have conversations about what plans are in place for the near future and how business will be impacted. Don’t forget to check in with your fellow farmers too.”

On April 3, Wisconsin Senators Tammy Baldwin and Ron Johnson sent a letter to the secretary of the Department of Agriculture, Sonny Perdue, requesting further assistance for the dairy industry.

They called for monetary aid to be granted to producers, and, like Klussendorf, said enrollment to the farm insurance programs needs to be reopened.

“We urge you to provide funding to states to help them resolve supply chain disruptions and keep agricultural products and food moving as it should in order to reach consumers when and where they need it,” the letter stated. “Reopen enrollment for the Dairy Margin Coverage program and make payments retroactive to the beginning of the year. Reopening enrollment in the program could effectively utilize existing USDA authorities to effi ciently distribute funds from the $23.5 billion provided in the CARES Act.”

The senators urged the federal government to create dairy purchasing incentives, and suggested they buy up the bulk of unbought dairy products to alleviate some of the financial stress.

“Right now, warehouses are full of cheese that was on its way to restaurants, schools, cafeterias, and other places that are temporarily closed... These high quality dairy products could end up wasted if we do not get them out to consumers quickly,” said the letter. “In order for [dairy suppliers] to keep running, they need a market for their cheese, and in this extraordinary time, the federal government is uniquely able to purchase that cheese and make sure it reaches American dinner tables.”

Crops

Brent Tessmer, county conservationist of the Taylor County Land Conservation Department, said crop-based farms are still trying to recuperate from last year’s harvest as they enter into the new season.

“Many farmers are still trying to re-organize their crop rotations after the winter of 2018/2019 delivered widespread winter kill of hay fields, resulting in changes to what crops were planted where and increased planting costs,” Tessmer said. “The 2019 growing season was a struggle due to wet weather which led to reduced yields, wet grain, and a late fall harvest.”

Tessmer noted that farmers with large manure storage sites had it a bit easier, while those with small sites ran into problems.

“Farmers that had enough on-farm manure storage to make it through the winter spread less fall manure or not any at all. This will lead to a busier spring for manure haulers. Farmers that had limited on-farm manure storage were forced to spread manure on frozen ground,” he said, adding that the practice can pollute the environment and should be avoided if possible. “Unfortunately, manure spread on frozen ground is well known to move off the fields as runoff during snow melt.”

Tessmer went on to say that manure storage could continue to be a problem for farmers going into the new season, but that there are resources available to help them.

“So far the weather has looked good this spring, but if we get a wet period that delays spring field work, many manure pits will be in danger of overtopping,” he said. “We encourage farmers to contact the Land Conservation Department with any questions or concerns about their manure strategy for this spring.”

Last year’s slow season will put an increased burden on farmers going into the 2020 season, but this may present new opportunities to some.

“Due to the late fall harvest there was less fall tillage performed, which is good for reducing soil erosion, but will lead to an increased spring workload for farmers that choose to till their fields,” said Tessmer. This may be a good opportunity for farmers to explore the economic and efficiency benefits of no-tilling their crops.”

Emergency Planning

The COVID-19 pandemic is predicted to lead to disruptions in the agriculture community, both in terms of farm yields and supply chain fluidity.

Sandy Stuttgen of the UW-Madison Division of Extension Taylor County suggests that farmers outline a procedure to keep their farms above water, should they or a critical business partner fall ill.

“Now is also the time to dust off or create your farm’s business continuity plan... Create a current emergency contact list and a list of individuals your farm will need to consult,” she said. “Involve your farm family and employees in the drafting of this list, and over a few cups of coffee, seriously brainstorm your contingency plans.”

Stuttgen pointed out that many farmers are in an elderly age group, and therefore are considered at-risk for infection. She said it’s paramount that farmers take the virus serious, and don’t risk their health for the sake of their farm.

“Working through a COVID-19 infection during planting likely is not wise, particularly given the reported death rates from COVID-19 in other countries,” she said. “As a result, farmers may wish to emphasize measures suggested by health officials: washing hands, limiting travel and social distancing.”

Richard Halopka of the Clark County Extension echoed Stuttgen’s sentiments, saying that farmers are concerned about the pandemic just like everyone else.

“Farmers have many fears short term. What price will I receive for my products I produce? Will I be able to move my products to market? Will a family member or an employee of mine contract this virus?” Halopka said, stating that it’s important for farmers to not over extend themselves.

“Farmers must continue to manage their farms using the best management practices available to them,” he said. “Use good judgement to protect their families, employees, and people they connect with day-to-day. Care for their livestock and their crops.”

Local farms and stores alike, the incoming financial toil will be hard on everyone.

There are those who inherited a family business that are now forced to stand by and watch as the heirloom slowly sinks, even as they pour their own savings into it. There are those who had the zeal and thirst to succeed, only to collapse due to no misstep of their own.

Truthfully, there is little we can effectively control in our current trial. But together, we can maintain the framework of our immutable communities, and continue ahead, unravaged by the world’s swelling plight.