Troubled Farm Economy Hits Home for Farmers and Agricultural Businesses

Published in Grassroots: May 2018
By Steve Ammerman

Todd Giroux knows just how tough times are right now for farmers. He milks 55 cows while at the same time attempting to build a new barn following a devastating barn fire last November. His animals survived and so did his spirit for farming, but it hasn’t been easy.

“Looking at putting up a barn in the face of the prices that we are seeing is scary. I am not going to lie to you. It makes me wonder what I am doing, but there has always been a bright side and I can’t look at the world any other way,” said Giroux, Clinton County Farm Bureau President.

Right now, dairy farmers are facing their fourth year of low milk prices. The Preliminary Progress Report of the Cornell Dairy Farm Business Summary has an average total cost of production of $19.41/ cwt, and a range of $17.31/cwt to $23.33/cwt. Those numbers are well above what farmers are receiving in their milk checks, currently around $15/cwt. In other words, it costs more to make the milk than what they can sell it for. This coupled with tightening credit, reduced equity and higher production costs, is forcing some farms to make tough choices.

Not a day goes by in the Farm Bureau office that staff doesn’t hear a sobering story of a farmer close to going out of business or potentially being cut off by their lenders. It is far reaching and it is not just effecting dairy. Grain and soybean prices are half of what they were just five years ago. Beef prices have taken a hit. With the talk of a trade war with China, other popular New York commodities like apples and wine, could suffer too. The farm economy as a whole is struggling.

“You can definitely feel it getting tighter,” said Tony Marzolino, Tioga County Farm Bureau Membership Chair. “The dairy industry is having a huge impact across the board. It has been so depressed for so long it is effecting everything in the rural communities.”

Marzolino operates a 1,000-acre organic hay and forage farm with two of his neighbors in addition to raising 30 beef cows. He says his hay customers are being more conservative and price conscious with their purchases. In turn, he has dropped hay prices twice, just trying to stay competitive with the conventional market. As far as his beef cows go, normally some of the herd would have already gone to market. Not this year.

“The auctions have been terrible. It has been extremely inconsistent or sometimes you don’t get a price at all. Right now we are going to keep feeding them to the end of summer to see how the markets play out,” he said.

He has also made the decision to hold off on making any new equipment purchases for the farm. That in turn affects businesses that support agriculture, like L.J. Hand Farm Center Inc., a retail farm supply store in Fultonville.

Sandra Borden took over her uncle’s 51-year-old business when he passed away a few years ago. She too is feeling the down farm economy. She said she noticed things slowing down last November. In April, she made the tough decision to send out letters to her customers saying she could no longer provide in-house charge accounts where farmers could pick something up and pay later. It is largely a reaction to farmers not being able to pay their bills. It was a hard decision to make, especially knowing so many of their customers were personal friends with her uncle Lynwood.

“We do care. It is not just a business. It was a relationship with Lynwood. We want to carry on the values that he instilled in us the best way that we can. Unfortunately, what is happening with the economy is forcing our hand in order for us to survive,” Borden said.

She reached out to New York State Agricultural Mediation Program for assistance in helping her business work with farmers to settle any debt they may have in a constructive way. She wants to do whatever she can to give her customers options. This includes bartering for services and offering to sell farm equipment for the farm and then apply the sale to their bill.

“We are certainly open to discussion and willing to work with them to resolve any past due accounts because that is how Lynwood would,” she said. “We don’t want any of them to feel embarrassed or like we are looking down them because we know what it is like.”

The toll is rising. New York State has lost nearly a thousand dairy farms between the 2012 and 2017, according to USDA statistics. And many are afraid those numbers will continue to climb.

“It is unfortunate. The farmer is the backbone of the country,” Borden said. “Farmers should be applauded and not keep taking things away from them and regulating them on everything.”

The down farm economy and financial pressures it has created led many organizations to work together to offer services. New York Farm Bureau joined with NY FarmNet to host two planned stress management and farm business seminars for farmers and agri-service providers.

The first was held April 19 in Geneva at Cornell’s Experiment Station. Senators Patty Ritchie and Pam Helming cohosted the events in their districts.

Erica Leubner is a FarmNet family consultant and spoke about the signs of stress and burnout. “The number one thing that we hear from farmers across the board is the inability to sleep through the night,” Leubner said.

They in turn, she said, will get out of bed and go to work in the middle of the night. Working with high stress and little sleep can make for a dangerous combination on the farm. She emphasized the importance of having a healthy diet, working on a sleep routine, exercising, setting boundaries, and still finding time to do something that they enjoy. All of these things can help clear the mind and allow someone to focus better on the problems at hand.

“Our head is like a snow globe. You need to settle it down,” she said. “The only way to get through a situation is with a clear mind.”

Leubner’s workshop also talked about the importance of listening and acknowledging the pain and extreme emotions farmers may be feeling. In addition, she reinforced that through places like NY FarmNet help is available. She recounted one client who was near the end of his rope and so consumed with stress that he refused to even look at his finances. However, once they sat down and examined his records, he was only $27,000 in debt, a figure way more manageable than he had estimated.

“Farmers are so resourceful. They walk out the door and fix something in the moment, but this they can’t fix so easily. A phone call is doing something,” Leubner said.

Tony Marzolino is NY FarmNet consultant as well as a farmer. His financial work has helped earn additional off farm income while also helping his fellow farmers. He too has seen the stress first hand, even for those looking to get out of farming.

“Now is not a good time to sell anything in a farm economy. If you have a dairy and want to get out, your assets are worth dramatically less because of the lower market value right now. Even if they don’t want to milk, they are forced to milk anyway,” he said.

Marzolino says more people outside of agriculture need to be made aware of what is happening and he is encouraging Farm Bureau to lead the way. Todd Giroux believes the same. That is why he helped Clinton County Farm Bureau organize a press conference this winter in the Plattsburgh area to talk about what farmers are facing.

That event led to an hour-long special on the dairy crisis on their local PBS station. “My biggest message is that it is not just a big farm, small farm thing. It is every farm. No matter if you are milking 30 cows or 3,000 cows, it is not easy for anybody right now. If this whole big world is going to work, there has to be room for everybody too. We are always going to need new farms, not just bigger farms,” he said.

He also looks at the big picture. Like Borden’s farm supply center, when the farm economy is in trouble, the entire rural economy suffers right along with it.

“It is crazy how the farm dollar gets turned around. It is big. And the more farms that disappear, the more it will affect our local economy. We need everyone to keep it going,” Giroux said.

He says the crisis has brought out farmers he typically never hears from who are looking for answers. He hopes that they get engaged in New York Farm Bureau’s public policy process and stay involved when times eventually improve.

“Keep coming. There are fewer of us these days , we need the voices more,” he said.