Farmers Celebrate Ag but Are Seriously Concerned about a ‘nightmare’ of a year
Cooper Garlisch, age 2 ½, was not about to lose the Cutest Little Farmer contest. Climbing atop his red toy tractor, he scooted himself across a stage at the Illinois State Fair with gusto, drawing cheers from an audience that seemed to appreciate the showmanship. His dad, Scott Garlisch, watched with amusement, soaking in one of the sweeter events of the annual celebration of all things agriculture — and putting aside, for a moment, the stresses weighing on his farm as the industry faces what some say is the worst year in memory. “I have two young boys, I want to ensure their future if they want to be in ag like my dad was, like my grandpa was and like I’m involved in,” said Garlisch, 33, whose family grows corn and soybeans and raises cattle in Mason County. “And it’s not a good time.” Bad weather. Trade uncertainties. Volatile prices. Paired with the high cost of land, equipment and fertilizer, “I tell ya, it’s a nightmare,” said Roger Brasel, 72, who has a trucking operation as well as a hog, corn and soybean farm in Milford. “In 50 years of farming, I have never seen anything like this year — never,” said Caroline Bartz, 70, as she lingered in the swine barn with her family, which raises hogs and grows hay and other crops on about 500 acres in Morgan County. Some said the celebratory spirit of the fair, which ends Sunday, was shadowed by palpable concern. “They’re all worried about what’s going on at home,” said Bartz’s 19-year-old grandson, Dalton Bartz, of the farmers who traveled from across the state for the event.
From June: Because of historic rains, less than half the normal amount of corn has been planted in Illinois. The next weeks are make or break for farmers.
“You can definitely tell,” said Bartz, who is studying agriculture business in college. “It’s kind of been a little cloudy around here, just with all of the atmosphere.” The weather has been the main enemy. A deluge of spring rain that delayed or prevented planting has been followed by a dry, hot summer that further threatens the size and quality of corn and soybean crops. Garlisch said 170 acres on his farm went unplanted because of flooding, and he had to plant other fields three times because they kept getting drowned out, only to face lack of rainfall now. “We haven’t had measurable rain since July so we’re really dried up and our crop isn’t looking very good at all,” he said. Across the country, the wet spring meant some 19.4 million insured acres went unplanted, the most since the government started tracking it in 2007, according to the U.S. Department of Agriculture.
Any hope that a smaller yield would boost prices has been stymied by the escalating trade war with China, a major buyer of Illinois agriculture. Illinois is the No. 1 producer of soybeans in the country and China is the No. 1 buyer. Prices are down $2 a bushel from last year. “Some of the rallies that normally would have happened because of weather pressure haven’t materialized because there’s been a little bit of a wet blanket in terms of trade on top of those rallies,” said Eric Hodel, 44, whose family farms sheep, grain, hay and straw on about 1,300 acres in Metamora, near Peoria. Agricultural exports from Illinois to China fell 77% last year due to steep retaliatory tariffs, and the blow deepened earlier this month. China declared it had stopped purchasing U.S. agricultural products altogether, after President Donald Trump threatened to impose tariffs on $300 billion more in Chinese goods. With China now sourcing soybeans from Brazil and other countries, the risk is that U.S. soybean farmers have lost that market for good, Illinois Soybean Association Treasurer Jim Martin said as he sat outside a tent at the fair where a magician was performing. The good news, he said, is the industry is finding new markets in Europe and Asia, including Vietnam, Taiwan and India. “We think India may be the next China as far as a market for soybeans,” Martin said.
The Mexican market also has been growing stronger, and the agriculture lobby has pushed for Congress to pass the new free trade agreement negotiated between the U.S. and its North American neighbors after Trump scrapped NAFTA. Meanwhile, an epidemic of African swine fever in China has decimated that country’s hog herds and further hurt demand for U.S. soybeans, which are primarily used for feed. Hopes that U.S. pork producers might at least benefit by sending pork to China receded when that country slammed the door on its relationship with U.S. agriculture. The loss of that opportunity has been frustrating for Illinois, the fourth-largest pork producer in the U.S., which exports about a quarter of its product, mostly to Asia. It also has missed out on sales to Japan because of the U.S.’s withdrawal from the Trans-Pacific Partnership. “There’s so much potential out there, a lot of guys were expanding because they see that China and Japan have such potential,” said Illinois Pork Producers board member Dale Weitekamp, who raises about 22,000 hogs a year on his farm in Montgomery County. “But it’s just not coming as fast as we want it to. And we don’t know if it will come because it doesn’t sound like the China trade issues are being settled.”
Farmers are coping by reining in expenses, forgoing capital improvements and cutting back on equipment or other purchases. Most have jobs outside the farm. Hodel, the farmer in Metamora, who also works as chief operating officer at the Midwest Food Bank, is sanguine about the ups and downs. “It will be a tight year on the farm economy side but our forefathers have been through it before,” said Hodel, who spent 20 years at Caterpillar before retiring in 2017 to take the reins of the farm from his dad. “Everyone knows the industry is cyclical, so you plan for it.”
But the belt tightening has had a ripple effect, affecting grain elevator operators, local chemical representatives and machinery salesmen, said Mark Reichert, who is on the board of the Illinois Farm Bureau. Deere & Co. on Friday cut its profit expectations for the year, citing the escalating trade war with China and the difficulties farmers are facing. Farmers, he said, tend to be an optimistic lot, but this year they’ve been tested. “I will say that we are optimistic that we can’t wait for 2019 to get gone and then we’re already looking forward to ’20,” Reichert said.
Mounting financial pressures over the years have been fatal for some farms, especially those with debt. Delinquency rates for commercial agricultural loans are at a six-year high and farm bankruptcies grew 13% in the 12 months ended June, to the highest level since 2012, according to the American Farm Bureau Federation. Illinois had 15 farm bankruptcies over the 12 months, up from 10 the previous year. “We’re going to lose farms over this year, there’s no doubt about that,” said William Anderson, 31, a high school agriculture teacher who has a small farm in Bureau County, one of the hardest-hit areas in the country by the bad weather. “A lot of the guys are going to be able to ride out the storm, and if we can have a good year next year, things will improve and life will go on,” he said. “But if we get in a cycle where we have several years in a row, it’s going to get pretty bad.”
Garlisch is worried. He was always eager to run his family’s 100-year-old farm, and after college worked as a corn options trader at the Chicago Board of Trade, as a seed salesman and as a livestock judging coach at a community college to become a better farmer. “There are farmers going belly up in our community right now, and it breaks my heart to see just because I don’t want to be the next one for that to happen to,” Garlisch said. “There’s nothing coming that looks like we’re going to get a breath of fresh air.” The government has stepped in to help the industry. Earlier this month, the USDA declared an agricultural disaster in all 102 Illinois counties because of the flooding, allowing farmers who experienced planting delays to access low-interest federal loans to replace property and cover production costs. It also promised up to $16 billion in aid to farmers to allay the pain from the trade war this year, on top of $12 billion in trade aid distributed for last year’s crop. Illinois soybean farmers were among the primary beneficiaries of that aid, which allowed most to break even.
Not everyone has wanted to take subsidies, and some look askance even at crop insurance programs that allowed farmers to skip planting after the floods. “I shouldn’t say it, and a lot of them are my friends, but in the long run that’s going to make (prices) higher for everybody — cereal, hog feed, everything,” said Brasel, the farmer from Milford. “We don’t like to take bailouts,” he added. “We like to plant our plants.” Despite the challenges, the state fair was alive with hope for the next generation.
In the swine barn, 5-year-old Delaney Crouch stood out among the crowd showing their Yorkshire pigs. Wearing a crisp shirt, jeans and a pink bedazzled belt, she tapped her show whip against the sides of a waddling pale pink pig more than half her size to guide the animal around the ring, finishing with a blue ribbon. Minutes later, showing another pig, she got another. Her mother, Cassie Crouch, 37, a high school agriculture teacher, said the family, which runs a sheep and grain farm in Moroa, had partnered with a nearby pig farm to expose her daughters to show pigs and teach them “a broader ag life.” “It has made them better agriculturalists,” Crouch said of Delaney and her 10-year-old sister, Morgan, who aspires to be a large animal vet. But the industry’s challenges are dimming the prospects for future farmers. Many young people who want to work on their family’s farms find there isn’t room for them there because farm income can’t support that many people, said John Edgar, assistant director of the Illinois Association of Future Farmers of America. Net farm income dropped by nearly half between 2013 and 2018, to $63 billion, according to USDA. “Our farm wasn’t big enough to sustain me going into the operation,” said Edgar, 27, who grew up on a crop farm near Carbondale. “I have a feeling in 10 years I will be watching my family farm be sold.” Others who want to start farms confront high costs that make it nearly impossible to get into the business as a small operator, he said. Ron Janssen, 21, of Avon, decided when he was a high school freshman that he wanted to raise cattle. The junior college attendee has 10 heifers, but the cost of labor, rent, vaccinations and breeding makes it difficult to get off the ground. “Honestly the thing that’s helping the most is neighbors and other farmers who want to help someone who is trying to get into this industry, because they realize it’s becoming an older generation and they don’t know what’s going to happen next,” Janssen said.