Farmers enjoy perfect harvest conditions after 2 ugly years

MANKATO, Minn. — This was the fall that area farmers had long waited for. A near perfect growing season and a mostly dry September and October allowed for a quick harvest and strong yields.

Harold Wolle, who farms with his son Matt near Madelia, said the two previous years were a trifecta of bad news — cold wet springs, wet falls and low crop prices.

"In 2018 I told my son, don't worry 2019 will be better. But it was worse," Wolle said last month. "But now we're getting a good crop."

Kent Thiesse, farm management analyst and vice president at MinnStar Bank in Lake Crystal, said the merging of great yields and higher prices is a welcome relief.

"For many farmers 2019 was the worst they've ever had in their farming history. And to turn around and have one of the more favorable years shows how extreme things can be."

Andy Oak, who farms near Le Center, said the good fall will bring some relief to those farmers who are on shakier ground financially.

"We got kicked around pretty good by Mother Nature the last couple of years. This will help heal some financial ills from the past couple of years," Oak said.

Deacon Tim Dolan, of the New Um Diocese and a former Extension educator, has for years counseled farm families in distress. He said that in the first months of the pandemic his services were sought out.

"I was probably talking to three to five families a day. Now it's down to a few a week," Dolan said.

He said the number of mediations between farm families and their lenders also has crept up as a couple of years of low commodity prices and now the pandemic caused more families to fall behind on payments.

Soybean prices were pushed up in early fall as China began buying more beans as agreed to in the Phase 1 trade agreement it made with the United States.

Rising exports mean there may well be record U.S. exports to China over the next year. But that record volume doesn't mean the goals of the Phase 1 agreement will be met. That's because the trade deal goals are based on the exported value of soybeans sold and while recently higher soybean prices are still lower compared to most prior years.

"The tariffs are still in place so there isn't any ethanol or dry distiller grains going to China. We'd like to see those tariffs lifted so it's economical for China to purchase," said Wolle, who serves on the board of the National Corn Growers Association.

The pandemic hammered livestock farmers hard as restaurants and food services shut down, dramatically cutting demand.

Glenn Stolt, CEO of Christensen Farms near Sleepy Eye, said things have rebounded some but the effects of the pandemic, short and long term, continue to play out.

"It has been an interesting year, to say the least. Certainly within agriculture and within the pork industry it has been something one would never have imagined."

Christensen is one of the largest family-owned pork producers in the country and has ownership stakes in processing plants.

Still, he thinks one of the biggest obstacles to ethanol — reluctance by some to use it in higher blended levels in gasoline — is being relieved as consumers are more comfortable with using it in their vehicles. In the early years ethanol was blended at 10% into gasoline but now is often blended at a 15% ratio — often referred to as E15 or unleaded 88 octane gas.

"Our 15% continues to be a popular product. As we get more consumers who use E15, we will have more growth. It's good for consumers, it's good for ethanol, it's good for corn growers, and it's a cleaner-burning fuel for the environment," Wolle said.

He said ethanol also had to overcome misinformation about ethanol damaging engines. The EPA has approved ethanol for all vehicles that are 2001 or newer.

And, Wolle said, there was some confusion among consumers because the fuel is labeled both E15, which refers to the percent of the mix, and as unleaded 88, which refers to the octane of the ethanol-gas blend.

"So corn growers try to continue to educate the public on the different blends of ethanol and what will work good in their vehicle."

ASF is not dangerous to humans but it is fatal to pigs. A huge outbreak of the swine fever in China, the world's biggest pork producer, and elsewhere in Asia led to massive changes in global pork trade flows. It recently broke out in hog herds in Germany.

"As an industry we've been working very hard the past few years to prepare for an ASF event. That is still viewed as a significant threat to our industry. But I think the work that had been done by the industry and our team at Christensen Farms has paid a benefit."

He said some of the preparations for big impacts in their operations and the market because of a potential ASF outbreak were used to move rapidly when the COVID-19 pandemic hit. "We got on it quickly, but we weren't able to mitigate things completely."

When demand for pork ground to a near halt within food service and processing plants had to close, Christensen and other producers had to euthanize portions of their herds because they had nowhere to sell them. They also shifted quickly to focus on the cuts of meats and types of pork products that were seeing higher demand in grocery stores, while scaling back on the types of products sold to the food service industry where demand had flagged.

"Sitting here today I really applaud our team here and what we did and how we did it. We got as much product into the food system as possible even though a lot of the (processing) plants we would deliver to were shut down or partially shut down," Stolt said.

But he said parts of the processing supply chain remain challenged by difficulty finding enough workers. "We were dealing with a labor shortage before COVID and certainly more so now."

The USDA reported that the U.S. inventory of all hogs and pigs on Sept. 1 was 79.1 million head. That was up 1% from a year earlier but down 1% from June 1 of this year.

The number of breeding hogs, however, was down 2% from a year earlier.

Stolt said he and others in the industry are still waiting to see what hog inventory will be longer term. "The question is it a permanent reduction or a temporary reduction? I think we are in the early innings as an industry in seeing the effects of this pandemic."

He said that even before the pandemic the industry was seeing pressure from plant-based proteins and a push by some to eat less meat.

Hog prices remain volatile. They came down early in the pandemic and then rose some but remained below-normal levels until recently due to ASF hitting markets in Germany.