Although recent rain has improved range and pasture conditions in the Four Corners Region, farmers and ranchers hope that this recent moisture indicates that we’ve moved into a more normal participation pattern, but they’re are worried that drought conditions will return and hang around through the fall and winter. But some hay producers didn’t fare well with the moisture, since they had hay on the ground ready to bale it when the rains struck, degrading quality of the crop. Hay sales have also dropped off as buyers wait to see if improved pastures will carry them into the winter, and hay prices will moderate due to less demand.
Over the past few years, it’s been tough sledding for many agricultural producers, but reports released by the Kansas City and Chicago Federal Reserve Banks last week offered some good news to farmers and ranchers. The Kansas City report stated that a sharp turnaround in agricultural economic conditions because of support from government programs related to pandemic relief and a turnaround in market prices for grains and livestock that resulted in farm income and loan repayment rates increasing from a year ago at the fastest pace on record. These improvements in farm finances eased credit issues and contributed to softer demand for farm loans. At the same time, farm real estate values increased from 10 to 14% from a year ago in the Midwest, the largest increase since 2013.
Pork producers worst nightmare, African swine fever, has been reported in the Dominican Republic, a country that’s less than 1000 miles from U.S. shores. An outbreak of the disease in China in 2018 resulted in the death of 300 million pigs, and the disease is still affecting Chinese pork production.
This is National Farmers Market Week. Last Sunday, Secretary of Agriculture Tom Vilsack visited the Pearl Street Farmers Market in Denver, to encourage consumers to recognize the importance of the role that farmers markets play in connecting farmers to consumers. To mark the week, the Colorado Farmers Market Association has organized a statewide photo contest to promote shopping at farmers markets around the state. The winner will receive $30 to spend at their local market. Details are on on Facebook or at CoFarmersMarkets.org.
The Purdue University/CME Group Ag Economy Barometer marked a second month of sharp declines, with producers being less optimistic about both current conditions on their farming operations as well as their expectations for the future. James Minert, director of Purdue University’s Center for Commercial Agriculture said that “Farmers expect their input costs to rise much more rapidly in the year ahead than they have over the last decade, contributing to their concerns about their farm finances and financial future.” The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted June 21-25.
President Biden signed executive orders on Friday concerning anti-competitive issues in the United States that will impact farmers and ranchers. They include making it easier and cheaper for farmers to repair equipment they own by limiting manufacturers from barring self-repairs or third-party repairs of their products, empowering family farmers to increase their incomes by strengthening Department of Agriculture regulations to stop the abusive practices of some meat processors, and by committing $500 million to expand processing capacity in the meat industry. The National Cattleman’s Beef Association welcomed the announcement of rule-making to improve the accuracy of the “Product of the USA” beef label and implementing the $500 million-strategy to expand processing capacity as vital steps toward a more resilient industry supply chain. During a trip to Council Bluffs, Iowa, on Friday, Agriculture Secretary Tom Vilsack said that expansion of processing facilities would increase competition within meat and poultry processing, and make agricultural markets more accessible and fair. He said that “The COVID-19 pandemic led to massive disruptions for growers, food workers, and consumers alike, and it exposed a food system that was rigid, consolidated, and fragile. Meanwhile, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else. To shift the balance of power back to the people, USDA will invest in building more, better, and fairer markets for producers and consumers alike.”
Recently, I attended Horse Progress Days in Mt. Hope, Ohio, in the heart of Amish country. It’s a farm show where Amish folks and interested non-Amish farmers and horseman from around the country come together to watch demonstrations of the latest farm equipment that’s designed for animal powered farming, pick up information about small scale agronomy, and to share ideas. Since I use some natural horse power on my farm, I enjoy watching the draft teams work as singles, teams and multiple horse hitches as they demonstrate tillage tools, planters, cultivators, equipment for harvesting hay, logging and other tasks. I also enjoy talking to farmers who are making their living on small scale farms in the middle of the country, mantra of get big or get out has been popular since the 1950s. Non Amish folks often think that animal powered farming is a thing of the past and are surprised that new equipment is currently being manufactured to fill the needs of thousand of Amish and Mennonite farmers and hundreds of small scale non Amish farmers who are growing produce on farms of 200 acres or less. As the cost of new and used conventional agricultural equipment has escalated over the past five or six decades, it’s very hard for small scale farmers to buy equipment and show profit at the end of the year. But the equipment demonstrated at Horse Progress days is sized to be used on small scale operations and is affordable to those operators. All though Amish farmers are small, they support the operator’s families and often their parents in retirement, and most of the farmers plan to pass the farm on to their children who will run them when they retire. That Amish farms are profitable is driven home to me when I drive into Amish communities in the Midwest and see well kept farms, bustling towns and businesses that are obviously profitable. In comparison, non Amish towns are often ragged shells that have been hollowed-out by farm consolidations, which have stripped them of jobs and families to fill schools and maintain the tax revenue necessary to maintain town services. My Amish friends assure me that they are not Luddites who are opposed to new technology or ways of farming. They chose the technologies they will embrace based what will help them maintain their way of life and will allow them to use animal power into the future for farming, related businesses like logging, and transportation.
While demand for beef remains high in grocery stores, some livestock producers say they’re losing money and the Senate Ag Committee wants to know why. So they invited a rancher, a leader with the U.S. Cattlemen’s Association, an agricultural economists and livestock industry researchers to a hearing in Washington. It was carried out with the backdrop of accusations concerning the lack of transparency and anti-competitive practices in the cattle industry. Concerns include packers feeding and slaughtering cattle they own, rather than going to an open market to purchase cattle they need to keep their production line full, and packers making secret arrangements with certain feedlots to avoid public scrutiny of the prices they’re paying for cattle. Justin Tupper, Vice President of U.S. Cattleman’s Association pointed out that fed cattle prices are negatively impacted when the big four meat packers use these tactics as a means to keep fed cattle prices low. Ashland, Kansas Cattle rancher Mark Gardiner also blamed the low prices on the lack of processing capacity by the big four.
An issue that keeps resurfacing in the livestock industry is the power of meat processors to control the market prices of beef, pork and poultry. For example, four packers, JBS USA, Tyson Foods Inc. Cargill Incorporated and National Beef Packing Company slaughter 85% of all fed cattle in the United States. In May, a half dozen agricultural organizations came together to push for government action to look into this problem. Apparently that meeting got some notice in Washington. Last week, Republican U.S. Senators Mike Rounds of South Dakota and Charles Grassley of Iowa and Democratic Senator Jon Tester of Montana have proposed legislation to create an office for a special investigator within the U.S. Department of Agriculture. U.S. Agriculture Secretary Tom Vilsack is supporting this proposal, so farmers and ranchers will have to wait and see if finally, some light will be shone on this issue.
The higher temperatures that started building over the past weekend is forecast to continue to heat up for the next several days, and is intensifying the impact of the drought on crops throughout the Four Corners region and beyond. Farmers who receive water from the Dolores Water Conservation District in Montezuma and Dolores Counties are finishing up their only cutting of hay they expect to harvest this growing season, and irrigation equipment is setting idle in fields that would normally be green and growing at this time of year because farmers concentrated their water on their better fields and left other fields dry. Dolores County Extension Director Gus Westerman, points out that dryland crops like wheat and safflower may turn out to profitable this year in Southwest Colorado and southeast Utah if they were planted early and have deeper moisture that they can access because of their root development. Westerman said that the results of some soil assessments he recently completed found moisture from eight inches to deeper depths probably due to winter snow and spotty rain events that dropped an inch and a half in some areas, but left other areas dry. Although the growing season has started out dry, Westerman said that many dryland bean farmers have planted their fields in hopes of harvesting a crop this fall. The extreme dry weather affecting the western part of the country may soon have an economic impact across the entire country by driving up food prices, according to agricultural economists. There are reports of farmers in California’s Central Valley plowing up some vegetable crop fields and even pulling out whole almond tree orchards because there is no irrigation water to keep the crops and trees alive.