‘Slow bleed’ — farm bankruptcies rise


(11/28/2018)

by CHRIS ROGERS

Persistently low crop and milk prices are taking their toll on some Midwestern farmers. The number of bankruptcies among Midwestern farms rose significantly this year, according to a recent report from the Federal Reserve Bank of Minneapolis. The bulk of those bankruptcies were in Wisconsin, where 50 farms filed for bankruptcy between June 2017 and June 2018, according to the Fed. Federal Reserve analysts attributed that to the high number of small dairies in the Badger State and the particularly low milk prices dairy farmers have faced for the last few years. There were 20 farms in Minnesota that filed for bankruptcy, according to the Fed. In both states, bankruptcy filings more than doubled since 2014, when Minnesota had just eight and Wisconsin had 22, the Fed reported.

It may get worse before it gets better. Federal Reserve Director of Regional Outreach Ronald Wirtz forecast that, “current price levels and the trajectory of the current trends suggest that this trend has not yet seen a peak.”

One Trempealeau County crop farmer was among those 50 Wisconsin farms that filed for bankruptcy this year. His case is still pending.

“It’s tough out here,” Trempealeau County Farm Bureau President Shane Goplin said. “For the past four years in dairy and five years in commodity grains we’ve seen our prices at or below breaking-even prices. We’ve always been told to get more efficient, but there’s only so much a person can do in terms of getting more efficient.”

Local farmers enjoyed high prices for milk, corn, and soybeans in the late 2000s and early 2010s, but within the last several years, prices plunged and have stayed stubbornly low. Corn brought over $6 per bushel in 2013. As of September, Minnesota corn was worth $3.10 per bushel, according to the USDA. The federal agency pegged Minnesota soybeans prices at $8.32 per bushel in September, down from over $9 earlier this year and over $13 in 2014. USDA surveys measured Minnesota milk prices at $17.50 per hundredweight in September, up from $15.20 in July, but down from the over $25 in 2014.

“No, I’m not surprised by that,” Winona County Farm Bureau President Glen Groth said of the uptick in farm bankruptcies. “The main reason being that prices aren’t, I wouldn’t say, catastrophically low, it’s just they’ve been low for a significant period of time. So rather than a farm having a financial trauma, it’s been just a slow bleed.”

“Everybody who has been in the business a number of years knows there’s going to be peaks and valleys,” Goplin stated. The trouble is, many farmers have been waiting for the current slump to end for several years now. “I think they’re kind of anxiously waiting for that, but not expecting it anytime soon,” Groth said.

Asked whether he had a sense of how well Trempealeau County farmers were doing in general, Goplin responded, “I don’t know. I think there are still people who are doing fair. I don’t think anyone right now is flourishing in the ag community. There are definitely people where the goal is to farm another year and hopefully next year is better.”

Goplin pointed out, “It’s not just farmers it’s affecting. How many farmers have filed for bankruptcy? Well that’s that much less going into the local hardware store or the local C-store or the car dealership. The small town community — even Winona — Winona depends heavily in agriculture … It trickles down pretty fast from the farmers to local businesses.”

“There’s a lot of options for someone before they go down that route,” Groth said of bankruptcy. “No lender wants to go down that route.” Lenders often work with borrowers to avoid bankruptcy, and there are programs — including at the Farm Service Agency, the Minnesota Department of Agriculture, and the Wisconsin Department of Agriculture, Trade and Consumer Protection — to help farmers who are struggling with debt. For more information, visit www.fsa.usda.gov, www.mda.state.mn.us, or datcp.wi.gov.

Chris@winonapost.com

 

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