Some of our local memories will include two local packing plants closing and some agriculture producers getting caught at the wrong time in the wrong place. Last summer, hog and cattle producers watched livestock prices tumble while the meat price in the store soared. Someone in the middle of that exchange became extremely wealthy, but it wasn’t anyone we know.
National television and newsprint media were in Worthington more than once trying to tell our local COVID tragedies to the rest of the United States and the world.
Just-in-time economics is the most profitable way to earn the most money in business, but that theory failed miserably during this pandemic. We were taught and trained that a delivery can be made the day you need it. Disrupting that system created real life events of missing protective gear for medical staff and empty shelves and coolers in stores. Toilet paper led the way, but this is an unbelievable story for Americans to understand, as it was just the beginning.
The stories have continued on with back-ordered appliances, furniture, automobiles and parts for many different things still not available or restocked.
Agriculture has had its share of disruptions as well. Shuttered packing plants, and missing laborers in vegetable fields and orchards disrupted the supply chain and delivery methods for most foods. We cannot blame the farmer for any of these disruptions. They still fed their livestock and raised their crops.
Farmers want to create food to feed America because that is how their farms survive. Many people considered essential workers, including farmers, had to work while risking their own personal safety.
As meat prices tumbled to extreme lows, grain prices did the same. Farms were already looking at seven years of very low to negative incomes and June 2020 looked dismal. Minnesota lender mediations were increasing due to missed bank payments at levels not seen since the 1980s farm crisis. Lenders were concerned that forced farm auctions were going to become more common and that is never good for a local economy. The federal government must have had their ears to the ground because there was additional support lent to main street businesses and farmers who grow grains and meats.
This support has kept many main street doors open and farm businesses running for one more year. Stores are reopening and farm prices have rebounded, so our local economy is trying to recover.
The future for farmers looks better than it has for a long time with current new crop prices at good levels as our growing season begins. Hog prices are currently above normal while cattle and dairy farms could still use a boost in their pricing models. The interesting part of operating a farm is things are never as easy as they look from the outside view. You see, almost all the operating expenses for farms have increased this spring because of supply chain interruptions and higher priced inputs.
Future profits are not near as good as they may appear. Every farm is managed differently, but fertilizer prices have exploded, increasing over 50% from a year ago. Fuel prices continue moving higher.
Parts have increased over 200% in many cases. Tire costs have skyrocketed. If you sold your crop out of the field last year, before the prices increased, you have not increased your cash reserves enough to pay for these increased input costs. That’s what makes farming so interesting and financially risky. The variables can swing incomes and expenses both ways quickly.
We are optimistic for good weather and great yields in 2021. That will be a wonderful start to improving our farm economy and local economy.
I think by now, everyone locally knows someone who has died from COVID. Let’s not forget them as we all try to forge forward in this pandemic. Without the COVID-19 virus, they would still be here. Most have family and friends who miss them. Give them a few moments of your thoughts.
Finally, thank a farmer next time you see one. They didn’t quit farming during COVID times and, because of that, we still have the safest and most abundant supply of food in the world.