'Our contingency plan is panic': Farmers enter planting season amid low prices, COVID-19
"We're just going to try to white knuckle it through 2020," said farmer Betsy Jensen.
MPR News reporter Dan Gunderson has been checking in with Betsy Jensen, a farmer in northwestern Minnesota, throughout a year of farming, from prepping to planting to harvest — and back again.
Spring planting season is off to a slow start for grain farmers across the state. Some early fieldwork is underway, but planting is already running behind the five-year average.
Farmers are still trying to recover from a challenging 2019, when wet conditions delayed or prevented harvest in parts of the state, and many farms eked out a profit only with the help of government aid.
But now the global coronavirus pandemic has meant that farmers are facing 2020 with crop prices driven down by the economic impacts of the virus’ spread — and the health threats of COVID-19 looming over the busy spring planting season.
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"I don't want to say we're depressed. But there's not a lot of enthusiasm," Betsy Jensen said this week from her office on the farm near Stephen, Minn., that she runs with her husband, Brian.
"We had probably the worst fall we've ever had in the Red River Valley, and all we could say was, ‘Let's just get through to 2020. … We just gotta pull through,’" she said. While many Americans watch the stock market and worry, Jensen watches the farm commodity markets as the pandemic drives prices lower.
"We're just going to try to white-knuckle it through 2020," she said.
The Jensens grow wheat, barley, corn, soybeans, canola and sugar beets. They also run a seed company, raising and selling wheat seed to other farmers.
At a moment when dairy farmers face the possibility of having to dump milk, and some hog farmers say they might have to euthanize young pigs because of a market glut caused by COVID-19 outbreaks that shut down some meat-packing plants, grain farmers can hang on to the crop and hope for better prices.
"The good news is we can store our grain. The bad news is that we can store our grain — and watch it go down in value,” Jensen said. “It's very discouraging, every day."
Falling crop prices have economists adjusting farm income downward for 2020. Jensen also teaches farm management at Northland Community and Technical College in East Grand Forks, helping farmers who are struggling to make the farm profitable.
The scenarios they face are grim: “You thought on January 1, your corn was going to be worth $3.25 [per bushel], and now it’s worth $2.50,” she said. “I thought I was going to have $200,000 of revenue [from last year's crop], and I’m only ending up with $125,000 and now I can’t pay this bill — 2019 was poor, and since January it’s only gotten worse.”
Congress has approved emergency aid for farmers, but it’s still unclear how much impact it will have.
“It’s substantially less than it’s been in the past couple of years,” said Jensen. “So I do appreciate their acknowledgement of what this has done to us, but this is not going to be a fix for grain farmers.”
In 2019 the federal government injected about $14.5 billion into the farm economy through direct payments designed to offset the economic impact of trade wars that drove down crop prices. Those payments were the difference between profit and loss for many farmers.
But federal aid doesn’t help a farmer convince the banker their balance sheet will work.
“We can’t put these government programs into a cash flow. We can’t rely on them,” said Jensen.
The Minnesota legislature has extended the Farmer Lender Mediation program — which allows farmers in debt a short reprieve from having to pay on their credit so they can restructure their finances — to 150 days, up from 90 days, to help farmers trying to get financing to plant this year.
“This is a critical program for farmers – especially now, when COVID-19 has caused the closing of agricultural markets,” said state agriculture commissioner Thom Petersen. “Having sixty more days to renegotiate or restructure will be a huge help in many cases,”
The U.S. Department of Agriculture reports that a record number of farmers signed up for crop insurance last year, also trying to mitigate financial risk.
USDA reports a record 1.77 million contracts for the Agriculture Risk Coverage and Price Loss Coverage programs for the 2019 crop year — more than 107 percent of the total contracts signed, compared with a 5-year average.
“Producers for several years have experienced low commodity prices, a volatile trade environment and catastrophic natural disasters,” said Richard Fordyce, who administers the USDA’s Farm Service Agency. “Farmers looking to mitigate these risks recognize that ARC and PLC provide the financial protections they need to weather substantial drops in crop prices or revenues.”
Jensen said she expects to see an increase in the number of farmers who either decide to get out because they don’t want to lose the equity they have in farmland, or because lenders refuse to extend their debt for another year.
But this year it's not just bad prices or bad weather. COVID-19 looms over everything.
It’s caused a labor shortage on the Jensen farm. Two workers coming from South Africa couldn’t leave that country because of the country’s coronavirus-related travel restrictions.
And there are few options for finding workers locally to help during the busy spring and fall seasons.
"I don't know if my 16-year-old knows this, but they're home from school. I know she has class some days, but she might be a gofer, running things around,” said Jensen. “It's going to be all hands on deck. Anybody with a pulse, we're going to be putting to work this spring."
And amid the long hours, there's the worry of trying to keep everyone healthy. Jensen bought hand sanitizer in bulk from a local distillery. She wipes down door handles and surfaces.
But she's also a volunteer on the local ambulance squad — and worries about the possibility that she could bring the virus home with her.
"Don't drive by my yard after I've been on an ambulance call, because there's a pile of clothes on the front step,” she said, laughing. “I shower in the garage, and I try to keep everybody healthy. I certainly hope we can avoid it."
So far, Marshall County in northwestern Minnesota has only one confirmed case of the coronavirus — but Jensen casts a wary eye as the numbers of cases statewide creep up. And with it comes worry: If a worker or family member gets sick, and they’ve been driving a tractor, how would she sanitize the equipment and make it safe for other workers? How would she replace the sick person, who would be in quarantine during the busy planting time?
"These next couple weeks are pretty critical for our operation. We really need to get this crop planted. And if somebody gets sick, our contingency plan — is panic," she said. "As of right now I haven't seen any issues but there is a very dark cloud hanging over farmers right now worrying about what could happen."