Viruses, floods and an economic shoving match: All in a day's work on the farm
Farm profits plunging
As regular Water Blog readers know, we can't clean up the Mississippi River without addressing agricultural pollution.
Just like anyone else, it's a lot easier for a farmer to make eco-friendly decisions when they're not worrying about their bank account.
Unfortunately, the US Department of Agriculture projects a 9% drop in farm income based on fewer government subsidies, shifts in the global market, and higher input costs. The White House's trade war with China is a major cause of this decline, and the terrible weather of the past few growing seasons presages what could be a record flood year.
With family farms already struggling, it's time to rethink Minnesota's agricultural system and find fair, long-term solutions.
The China factor underscores our need to diversify
China is a key trading partner for American growers. U.S. exports surged from $3 billion to over $28 billion between 2000 and 2017, and Chinese demand helped drive Minnesota's economy in those two decades.
Opportunity, however, can breed dependence, and two deadly viruses illustrate how tangled and fickle global markets can be.
Two years ago African swine flu hit China, home to about half of the world's pigs, and caused a 40% drop in the pig population (whether through direct fatalities or preventive "culling"). It has been an ongoing catastrophe for animals and for the people who rely on them for income or nutrition. But there's always another side of the economic ledger, and the virus presented an increased market opportunity to American pork producers.
The second virus, coronavirus, prompted the Chinese government to effectively quarantine a large region beginning in late January. The decision has dramatically slowed China's economic growth and caused ripple effects around the world.
Layered on top of these two emergencies like a suffocating blanket is the trade war.
In retaliation for American sanctions, the Chinese instituted tariffs that hit agricultural products particularly hard. American pork producers who might have used the swine flu crisis to gain the Chinese market share lost out because tariffs made it less profitable to ship their hogs overseas. Soybean producers lost on both fronts: Fewer pigs to feed meant fewer soy shipments to China, and without extra American pork production ramping up to meet Chinese demand, they didn't even have an expanded domestic market.
American sales of other commodity crops like corn and cotton likewise suffered: agricultural exports to China were only $9.1 billion in 2018, the lowest levels since the end of the Bush administration.
Although the two sides finally agreed to a ceasefire last month, trade analysts worry that the relationship may never rebound to its previous trade levels, since China increasingly leaned on Brazil and other nations to fulfill crop shipments during the hostilities. Meanwhile, the coronavirus quarantine has cast a large shadow over the markets and pushed back the timeline for actual Chinese purchases of American goods.
Let's be clear: farmers didn't want the trade war. Even so, they desperately needed support after losing their biggest customer, and the White House responded with a $28 billion dollar taxpayer-funded bailout package. Barring a dramatic turn of events, that won't happen again this year.
Another wet year on the way
To make matters worse, 2020 looks like another very wet year in the Upper Midwest. Many fields still haven't dried out from the soaking they got in 2019, which means they'll be less able to absorb spring runoff when the snowpack warms in a few months.
Plants need rain, but too much of a good thing can spell disaster: equipment gets stuck in mud, heavy tractors compact the topsoil, fertilizer washes away, and young roots get waterlogged. Needless to say, farmers across the region are waiting anxiously to see what the weather brings. If it's anything like 2019, revenues will take a major hit.
Change can't wait
Farm revenues have always ebbed and flowed, and there will be some good years ahead even if we maintain the current pattern of bad weather and blurry foreign policy. But the trend line is clearly heading in the wrong direction, and at some point, farmers can't keep taking one step forward for every two steps back.
Changing that trend line means rethinking business as usual. It means adapting to the world we see changing around us — planting crops that improve soil structure and diversify our fields — and developing markets that aren't as dependent on one or two dominant crops.
FMR is approaching this challenge with a new initiative called the Forever Green Partnership, which aims to make Minnesota a leader in practices that better sustain our farm families, our soil and our waters.
We look forward to sharing more news about this project with you via our Water Blog in the months ahead.
In the meantime, to learn more about how local farm families are facing the growing storm we recommend:
• MPLS St. Paul Magazine: Minnesota Family Farm Takes on Big Dairy
• MPR News: Planning, Training, Challenge, and Hope — Passing the Family Farm to the Next Generation
You can help!
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