by CHRIS ROGERS
It’s been a crazy year for local farmers. The Driftless Region officially reached moderate drought conditions last week, and COVID-19 has been disrupting agricultural industries across the board.
Crop prices are low — corn fell to $3.07 in Minnesota in June, according to the U.S. Department of Agriculture (USDA). While milk prices appeared to have topped break-even levels for the first time in months — Minnesota milk rose to $21.20 in June, according to the USDA — a feature of the nation’s complex milk-pricing system means that what most farmers get paid is far lower.
“The joke is only three people in the whole world know how milk prices actually work,” Rollingstone area dairy farmer Becky Clark said. While milk prices have been up around $20 per hundredweight recently, Clark said what her farm actually gets paid is nearly $5 less than that because of producer price differentials (PPDs). Normally, PPDs help smooth out the difference in prices between milk used for drinking and milk used for cheese, butter, and the like. However, when demand for cheese-grade milk exceeds beverage-grade milk, PPDs can dip into negative values, according to the American Farm Bureau Federation. That is exactly what happened this year, when demand for commercial dairy cratered following restaurant shutdowns only to come back roaring as processors tried to keep up with reopenings and a USDA program that sent tons of dairy to local food banks. “You can’t just turn on a dime and change what you’re doing,” Clark said of supply chains. According to the Farm Bureau, that disruption caused the biggest drop in PPDs in the last 20 years. If farms break even at, say, $18 per hundredweight of milk, seeing that price cut by $5 makes all the difference.
“We lost 35 percent of our income when coronavirus hit us,” Mark Clark, Becky’s father, said. “Volatility is so hard,” he continued. “When I started in the ‘70s and ‘80s, the milk prices changed maybe 30 cents for the whole year.” Pointing to a $5 drop in milk futures, he added, “Now, we’re talking $5 in one month.”
“It’s a rollercoaster ride really,” Becky Clark said of this season. Still, she stated, “You just keep plugging away.”
“There’s always challenges,” Mark Clark said of farming.
Meanwhile, a moderate drought is reducing yields for some farmers, though not causing serious crop losses. From July 1 through August 18, Altura got just 3.4 inches of rain, more than four inches below normal, the National Weather Service reported.
“It starts to brown from the bottom up, and right now it’s not mature enough,” Becky Clark said, describing how the dry weather was impacting her family’s corn crop.
“I think there will be some yield reduction, but I don’t think it’ll be catastrophic,” Winona County Farm Bureau President Glen Groth said. “I think it’ll go from being a good crop to a pretty good crop.”
“The crops seem to be doing OK,” Darienne Frickson of Frickson Family Farms near Ridgeway. “It was significantly dry this year. It may hurt our yields a little bit, but we haven’t had any actual loss.”
After dairy farming for years, the Fricksons sold their herd last year and launched a direct-marketing business raising a bit of everything: pasture-raised beef, pork, poultry and eggs, as well as vegetables. “Unfortunately, it’s just as bad as it was if not worse when we quit,” Frickson said of the low prices for dairy farmers. She recalled her and her husband working to build up a dairy herd over a decade and even winning honors for their high-quality milk. “We were doing everything right, in our opinion, and still not being able to support a family with it,” she stated.
The Fricksons’ new venture is working out well, and as luck would have it, they saw extra demand thanks to the pandemic. “We’ve actually had a hard time keeping up,” Frickson said. “I think because of the pandemic a bunch of people chose to source their food locally,” she explained. The Fricksons offer home delivery, which became a huge hit when the pandemic struck, she added.
The Fricksons were also very fortunate to have appointments booked with local slaughterhouses for all of their animals for the next two years before COVID-19 outbreaks in major meat processing plants elsewhere in the Midwest caused a huge backlog in slaughtering that forced some farmers to euthanize animals and clogged up small, local meat lockers for months as they tried to help out with the backlog. It is really tough for people trying to find a slot at a slaughterhouse, Frickson said. The situation is a great example of why supporting de-centralized, local producers can make our food system more resilient, she argued. “When you monopolize an industry like that and then something like this happens, there’s no choice but to go without because they rely on two or three big companies,” she stated.