Seeking relief

Weather, economy challenge New North farmers

Posted on Jun 29, 2018 :: New North
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Posted by , Insight on Business Staff Writer

It is a tough time to be a farmer. Not only are farmers dealing with low prices for their products and worrying about a trade war with China, but crazy spring weather delayed planting crops and caused property damage across the New North.

Despite the challenges, farmers remain optimistic, says Tim Trotter, president of the Green Bay-based Dairy Business Association.

“Dairy farmers have so many issues before them, but it never ceases to amaze me the resiliency that farmers have,” he says. “There are some things in their control and a lot of things out of their control, but they stay persistent and move ahead.”

Trade wars and tariffs are two issues out of farmers’ control. With President Trump considering multiple tariffs against Chinese-made products and looking at metal tariffs against Mexico, Canada and European countries, the repercussions could harm the ag sector.

China and Mexico have canceled U.S. soybean shipments and instead opted for South American-supplied crops. Hitting much closer to home, European countries have discussed placing a tariff on Wisconsin dairy products in response to the steel and aluminum tariffs ordered by Trump. (Wisconsin’s dairy industry was singled out since House Speaker Paul Ryan is from the state; Kentucky products face a similar fate as the home of Senate Majority Leader Mitch McConnell.)

There also is the added worry that the North American Free Trade Agreement could fall apart, Kevin Skunes, president of the Corn Board of the National Corn Growers Association, said in a press release.

“The trade tit-for-tat could ultimately end up shutting the door on millions of pounds of pork, over 3,000 tons of beef and $14 billion of soybeans meant to be sold around the world,” he stated. “The expanded list of tariffs on exports is making America’s farmers the first casualties of the trade war between the U.S. and China. If the U.S. withdraws from NAFTA, there will be severe consequences for America’s farmers.”

During 2017, Wisconsin exported more than $3.5 billion worth of agricultural products to 147 countries — an increase of 3.63 percent over 2016. If tariffs add to the price of Wisconsin products overseas, sales are certain to decline, Trotter says.

“If it becomes too expensive to buy Wisconsin cheese in Europe, consumers could switch to buying cheese from another country, which is not good news for us here,” he says.

Unsettled skies

Since 2013, net farm income has decreased more than 50 percent nationwide, and the U.S. Department of Agriculture predicts income to drop another 6.7 percent in 2018. The main reason for the decrease is lower prices for commodities, such as milk, corn and soybeans.

With tighter margins, any additional stressor, such as weather, could become the fatal blow that knocks a farm out of business. So far in 2018, weather across the region has not done any favors for farmers. A late spring meant some farmers had to purchase extra feed for their animals, while a mid-April blizzard caused property damage.

Laurie Fischer, executive director of the American Dairy Coalition in Green Bay, says the heavy snow caused some barn roofs to collapse, leading not only to building repairs, but also leaving some dairies with no place for their animals. Neighboring farms stepped up, so every cow had a place to go during repairs, but transporting the animals came with an added cost. In addition, Fischer says not all milk haulers made it through the snow, causing some farmers to dump their milk.

The ADC led an initiative to encourage farmers in Northeast Wisconsin — Outagamie, Brown and Kewaunee counties were the hardest hit by the blizzard — to notify the Farm Service Agency about their weather-related costs in hopes of getting some relief from the state or federal government.

The cold, wet spring also delayed initial planting across the region, says Mike Ballweg, a University of Wisconsin-Extension agent in Sheboygan County. A dry, warm June could get all crops back on schedule, he says.

He explains that if farmers cannot plant corn by the first part of June, they switch over to soybeans. That could lead to a higher price for corn, but a lower price for soybeans if demand overwhelms supply.

Trotter says farmers need some good news after months of bad news.

“They really need something to turn their way,” he says. “There is some evidence that better days are ahead. We really think there will be an increased demand in the global market for cheese made with Wisconsin milk. As that global demand increases, state farmers will really benefit.”