Minnesota farmers optimistic, realistic as spring planting nears
Gene Metz walked into his soon-to-be-planted corn field near the town of Lismore in southwestern Minnesota, stopped, kicked the dirt, then squeezed a golf ball size wad of soil in his hand. It was still too wet for the farm's heavy planting machinery.
"It's just a little bit sticky yet," he said. "We're probably a week away from planting, maybe two weeks."
A brisk wind and warming temperatures on this day did a nice job helping dry out these fields, blowing a little optimism across Minnesota farm country as the new growing season nears. Many of the region's grain farmers have struggled to stay afloat in recent years amid a vast oversupply of grain worldwide that's held down prices to below breakeven.
There are signs, though, that Minnesota farmers are in a slightly better financial position than last year. A University of Minnesota and Minnesota State analysis found 31 percent of the state's farms lost money last year. That's a hefty portion, but it's an improvement from 36 percent in the red the year before.
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"I would say the sky is not falling," said Mark Greenwood, senior vice president with AgStar Financial Services, a Mankato, Minn.-based farm lender. "There are some instances where some clients are struggling financially. But overall balance sheets are still pretty strong."
Record corn and soybean harvests last fall helped buoy grain farmers, providing bonus income at no added cost. Yes, the big crop did add to the global oversupply. But even if it didn't make a farm profitable, it meant confessing less red ink in the banker's office.
Most farmers have responded to the challenging economic times by becoming better managers, learning how to maximize their harvest while cutting expenses, said Greenwood. "We're in a better spot today in terms of overall management skills than we were five years ago. You have to be."
There are other hopeful signs. A national trade publication index of farmers' optimism has increased some 73 percent over last year. The DTN/The Progressive Farmer report said President Trump's promise to reduce federal regulation of agriculture is the major factor, though last year's big harvest and lower costs for fertilizer and other supplies also helped.
Still, farm leaders are worried about the future. U.S. farm income has fallen by nearly half since 2013. Crops and livestock are a $19 billion industry in Minnesota. But with those commodities still mostly unprofitable, many farmers could see more red ink this year, said American Farm Bureau Federation public policy executive director Dale Moore.
"One better have a good risk management plan to deal with what looks to be a fairly long trend line before we get this turned around," said Moore.
Farmland accounts for about half the state's land mass. Metz and his son will sow corn and soybeans over 1,000 acres, the equivalent of nearly 800 football fields. Surveys indicate state farmers are betting soybeans will produce a better financial return than corn. So, soybean acreage will grow 10 percent and corn planting will drop by 5 percent.
Metz, who is also a Nobles County commissioner, said he's heard stories about farmers in trouble as he travels his district. Farmers who couldn't get a spring planting loan, or had equipment re-possessed. But he says most are hanging on and looking forward to another year.
For now, he added, worries about the bad economics are eclipsed by the encouragement that rises with a new crop.
"I guess if we weren't optimistic," he said, "we wouldn't be farming."