LISMORE, Minn. -- About 30 years ago in the midst of one of the worst farming downturns in the Midwest since the Great Depression, Gene Metz of Lismore was “real close” to being out of farming.
The southwest Minnesota farmer had to sell some of his land.
He survived, as did many family farmers who had land that had been paid off by their families decades earlier. But across the Upper Midwest, many others didn’t survive as high interest rates and low commodity prices took their toll. It tore apart families, causing suicides and political upheaval across the region.
As farmers now begin planting or preparing their land for another year, low crop -- and even livestock -- prices are taking their toll across the Upper Midwest again this year, on the heels of poor commodity prices last year.
Metz figures his break-even point on corn is about $4 a bushel, but the going price in the area is only $3.30.
It’s not a repeat of the 1980s, farmers and ag officials believe. However, it’s a “rough and tumble time” on many of the state’s 81,000 farms, according to Minnesota Agriculture Commissioner Dave , another survivor of the 1980s who was farming in western Minnesota near Murdock at that time.
said his department is looking at some producers facing a loss of $127 an acre this year on corn. So why plant? He said some have to pay the rent on land that is under contract plus many farmers are simply “eternal optimists” who are hoping to somehow pull out a profit.
North Dakota Ag Commissioner Doug Goehring said the state has already lost some farmers this year and many others are facing their last chance. He said he’s hearing “a bit of despair and concern” among the farmers on the state’s approximate 20,000 active farms.
“I’m most concerned about the farmers that started the last 10 to 15 years,” Goehring said.
Metz, who also serves as a Nobles County commissioner, said some farmers in that farming-intensive part of the state couldn’t get get operating loans last year. There’s more this year and it could even be worse in 2017 if prices don’t improve.
Like Goehring, he fears some of the younger farmers may be forced out of the business in the coming year.
A lot depends, Metz said, on how much farmers built up their cash reserves and how much they are leveraged after a few of the golden years of agriculture when prices soared for crops and livestock and before the downturn of the past two years.
In northwest Minnesota, ag business associate professor Margot Rudstrom of the University of Minnesota-Crookston said “it’s not pretty” there either.
“It’s as bad as we think it is,” she said.
She also agrees it’s not close to being a repeat of the 1980s as the “saving graces” are low interest rates and fertilizer and fuel prices that have dropped to help offset some of the pain of the lower commodity prices.
“So, no, we’re not looking at the 1980s again,” she said.
However, some farmers are being forced to restructure their debt and banks are being more cautious on operating loans.
As net farm income and profits are definitely dropping significantly across the Upper Midwest, Metz and the ag officials have some other advice to try to ride out the rough times.
and Goehring both suggest keeping control of family living expenses can help.
The Minnesota commissioner remembers when he survived in the 1980s it meant cutting out many of those expenses -- even going as far as to cut out health and life insurance.
Goehring said producers can’t control the weather or the markets, but they likely have to try to “tighten their belts and take a reality check” and try to control what they can.
Increased yields, of course, are another big help and farmers often try to find ways to find methods that will help.
Metz, for example, said thanks to timely rains he had record yields last year that helped offset the low commodity prices.
The ag commissioners note that they are several programs available on the state level to help producers through the tough times.
Mediation -- a method of trying to work out finances between banks and farmers -- is a popular program along with credit counseling.
It’s also a sign of the times as said mediations have climbed in Minnesota from 1,700 in 2014 to about 2,500 last year, and he’s expecting an even larger number this year.