MARION — Darwin Eisenga has been farming for around 25 years and the farming economy is looking “a little bleak at the moment.‘
Farmers haven’t been able to plant crops this spring, milk prices are low and relations between the U.S. and some countries it exports to are rough, he said.
To help with the stress, politicians and researchers are working to either get more funding and relief for farmers or finding ways to make their costs of production less.
Michigan State University researchers recently received $2 million to reduce feed costs in milk production. President Donald Trump has authorized the United States Department of Agriculture $16 billion for farmers. And Michigan senators Gary Peters and Debbie Stabenow are appealing to the USDA to aid Michigan farmers.
“Consistent rain and wet weather have created challenging planting conditions for farmers across Michigan this spring,‘ the senators wrote in a letter to the U.S. department. “We urge the USDA to provide flexibility and equitable treatment for Michigan farmers who have had to delay planting their crops.‘
What’s the economy doing right now?
As of April, Michigan has experienced the wettest 12-month period on record in the continental United States, according to a press release from Stabenow’s office.
Large swaths of Michigan farmland have seen precipitation measurements at double their normal rates. As a result, many Michigan farmers have been unable to plant their crops for the season. Even the crops that have been planted could see stunted growth and may require replanting.
Eisenga works on Eisenga Farms, which set aside 500 acres to plant black beans. Usually, they’d all be planted by June 1, but as of Thursday half of the acres hadn’t been planted yet, he said.
While the wet weather is putting stress on Michigan’s farming economy, there are also other factors, like the United States’ trade policies.
Tariffs and trade deals with Mexico and Canada have impacted it and China was a big buyer of commodities too. There seems to be a surplus of commodities and they’re not moving them to maintain profitable prices, he said.
High tariffs disrupt normal marketing patterns, raising costs by forcing commodities to find new markets. Additionally, American goods shipped to China have been slowed from reaching market by unusually strict or cumbersome entry procedures, which affect the quality and marketability of perishable crops, according to a USDA press release.
China announced higher tariffs in May on $60 billion worth of American goods in retaliation for Trump’s penalties on Chinese products. Duties of 5% to 25% took effect on June 1 on about 5,200 American products, including batteries, spinach and coffee, China’s Finance Ministry said.
Beijing’s move came after the U.S. raised duties Friday on $200 billion of Chinese imports to 25%, up from 10%.
Trade damages from such retaliation and market distortions have impacted a host of U.S. commodities, including crops like soybeans, corn, wheat, cotton, rice, and sorghum; livestock products like milk and pork; and many fruits, nuts, and other crops.
Trade issues have really had an impact on the Michigan economy, said MSU extension educator Paul Gross.
Michigan usually has a tremendous relationship with Canada and Mexico and “that really impacts our markets,‘ he said.
Michigan sends a lot of dry beans like black beans to Mexico, but right now they are not even quoting prices on them or are quoting prices below the cost of production.
“There’s a lot of challenges in the agricultural industry right now,‘ he said.
The current dairy economy isn’t good for farmers either because they produce a lot of milk. In fact, they are producing more milk than can be processed in the state and sometimes it has to be processed out of state, which increases travel costs, said MSU extension educator Phil Durst.
Farmers export the milk of one of every seven cows, but exports are also hampered by the current situation with the tariffs with Mexico. Michigan sends a lot of milk to Mexico and the situation with China has impacted farmers’ ability to send product there, he said.
Low milk prices aren’t helping the dairy economy, and feeding the 9 million U.S. dairy cows requires millions of acres of crops and accounts for more than half of total dairy farm costs, according to a Michigan Farm News article.
MSU researchers are currently trying to decrease that cost. By reducing the cost of producing milk, it will help farmers better “survive and thrive in this climate,‘ Durst said.
MSU conducts research to help dairy farmers
The Foundation for Food and Agriculture Research awarded MSU a $1 million grant to improve dairy cow feed efficiency. The Council on Dairy Cattle Breeding provided matching funds for a total award of $2 million, according to Michigan Farm News.
Food efficiency is a main determiner in farm economics because food represents the most significant cost in producing milk, Durst said.
So if farmers can become more efficient in turning food into milk then it will take down the costs for farmers.
Food efficiency is like gas mileage for a car. Durst’s Ford might not get as many miles per gallon as a smaller, lighter car that is better at using fuel efficiently, he said.
So by studying cow genetics and selecting cows with the highest feed efficiency, farmers could reduce expenses for cows that produce the same or more milk while consuming less food.
The MSU project will measure feed intake, milk production, body weight, and other information on 3,600 dairy cows to add to the existing database created as part of an earlier project. The researchers also will evaluate whether their genetic predictions can be used to decrease methane emissions from dairy cattle, according to Michigan Farm News.
Durst doesn’t know what the capability of this will be, but if it were to theoretically increase food efficiency by 10%, a farm that has 100 cows producing 80 pounds of milk per day with the cost of milk at $16, then it could save the farm $18,688 a year.
If it’s a 200 cow herd with double the milk, it saves double the money. If it’s a 1,000 cow herd, it saves $186,880.
“It’s not an insignificant amount,‘ he said.
It’s important, but it may not be enough to make an unprofitable farm profitable. However, if it manages to increase feed efficiency by 50%, that could be something real, he said.
The U.S. government steps in to help
Helping farmers isn’t just a Michigan endeavor, but a national one.
Trump has authorized the Department of Agriculture to provide up to $16 billion in trade mitigation programs to support farmers. This funding is in line with the estimated impact of China’s trade retaliation, according to a USDA news release:
• $14.5 billion will go to direct payments to producers through the Market Facilitation Program. The first payments will be made in July, and additional payments will follow in November 2019 and January 2020 if warranted.
• $1.4 billion will go to the Food Purchase and Distribution Program to purchase surplus commodities affected by trade retaliation. These products will then be distributed to schools, food banks, and other groups.
• $100 million will go to developing new export markets for American producers through the Agricultural Trade Promotion Program.
These programs will help support American farmers and give Trump additional time to work toward a long-term trade deal that works for the country, according to the USDA news release.
“On every front, we are fighting for our great farmers, our ranchers, our growers,‘ Trump said.
Producers of products like alfalfa hay, barley, canola, corn, dry peas, peanuts, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, upland cotton and wheat will receive a payment based on a single county rate multiplied by a farm’s total plantings to those crops in aggregate in 2019.
Dairy producers will receive a per hundredweight payment on production history, according to the USDA release.
These payments will help farmers to absorb some of the additional costs of managing disrupted markets, to deal with surplus commodities, and to expand and develop new markets at home and abroad.
Agricultural producers had until Feb. 14 to sign up for USDA’s Market Facilitation Program launched last year to help producers suffering from damages due to unjustified trade retaliation.
“President Trump has great affection for America’s farmers and ranchers, and he knows they are bearing the brunt of these trade disputes,‘ U.S. Secretary of Agriculture Sonny Perdue.
Although the details are still being worked out it will definitely help with production losses in Michigan, Gross said.
Farmers don’t like to take this type of money, they prefer to get their revenue from the market place, but when it comes down to it and you have to pay mortgage and bills at the end of the day you take advantage of what’s available, he said.
Will this impact Northern Michigan? If not, what can?
Michigan might get some benefits as a whole, but Eisenga thinks Trump’s additional funds will be “minimal help in Northern Michigan.‘
Here we don’t have mainstream crops or produce the yields they’re looking to give help to. Soybeans are not a big commodity here because it is hard for them to mature and corn is used for silage, not for grain, because it can’t get dry enough to harvest in the fall, he said.
The state of the economy has impacted Eisenga Farms and the contract price for wheat and black beans was lower than it has been in the past because of the supply, he said.
As for other funding availability, Gross said there really isn’t any other funding available for struggling farmers other than working with lenders.
The USDA is set up for crop insurance. Farm programs have been tailored over the years from direct payment to insurance so farmers are responsible for their own risks, he said.
People always think about farmers who are at the tip of the sword, but the providers, hardware stores, the seed dealers, all feel the impact as well.
“It does impact those businesses in the community just as much as those farmers,‘ he said.
For what could change the currently stressed economy, he said the first thing that would make farmers happy is if the weather patterns would change and they could plant their crops. Getting trade agreements settled would provide stability in the market and allow for planning as well.
“That would definitely take some stress off,‘ Eisenga said.
-The Associated Press contributed to this report