By JAN LARSON McLAUGHLIN
BG Independent News
Across the county, citizens are saddened at the loss of the planting season and sympathizing with local farmers unable to do what they do best.
But there are far more people who will see their livelihoods affected by the empty fields – people, unlike farmers, who don’t have the benefit of crop insurance.
There are seed companies whose seed sits unused, fertilizer companies whose product isn’t needed, and grain elevators whose silos will not be filled this fall. Livestock farmers are desperately searching for corn to feed their animals, while ethanol producers will be competing for that same small harvest of corn.
Some local farmers were able to scramble and get soybeans planted last month when the soil finally dried up enough. But those late beans risk limited yields, and are at a greater mercy of unpredictable summer weather, said Bill Wallace, operations supervisor for The Andersons.
“A lot of them are gambling,” by the late planting, he said.
The dry period also allowed farmers to put in some cover crops, just to keep the weeds down.
“The weeds are just obnoxious,” Wallace said. “And that’s more money out of their pockets.”
Ripple effect will be far reaching
But despite the hardships ahead for farmers, they are better off than many others in agriculture related businesses, Wallace said.
“The farmer is in better shape. The farmers have crop insurance,” he said. “Unfortunately, the ripple effect in ag is much more than the guy on the farm.”
With farmers being understandably cautious, there will be fewer giant pieces of farming equipment being bought as farmers try to stretch out the life of aging equipment.
“They are going to get their bills paid,” Wallace said. “But there are not going to be pickups bought at dealerships.”
“They will tighten their belts,” and that will be felt throughout the community, Wallace said.
“The trickle down is much larger and much worse,” he said. “It’s big. If it was just Ohio that would be one thing. But the fact is that it’s the main growing belt. In my lifetime, I’ve never seen anything like this.”
Grain elevators are hurting
Like other small member-owned elevators, Countyline Co-op in Pemberville has no insurance to fill in for the loss in revenue. The empty fields this summer mean elevators and others lost out on the opportunity to sell fuel, provide agronomy services, spray fields, and sell seed and fertilizer.
And when the typical harvest time rolls around, the elevators will not take in the usual loads of grain, nor will they be needed to grind feed for local livestock producers, said Marc Schaller, of Countyline Co-op.
“Our business depends on bushels,” Schaller said. “If the farmer doesn’t plant the crop,” those bushels don’t exist. And many farmers unable to plant are talking about canceling contracts with elevators.
Schaller called that a “double whammy” for elevators, since they will lose income in the spring when they normally supply farmers, and they will lose revenue at harvest time when the bushels of grain aren’t coming in.
Countyline built extra storage space last year for the harvest of local customers. But this year, much of the space will go unused.
“The farmers’ stress gets magnified as it goes up the chain,” Schaller said.
“They’re the only guys that will be somewhat whole in this,” he said of farmers covered by crop insurance.
The loss to elevators is more than chump change. In July of 2017, Countyline Co-op had brought in $1.6 million in agronomy revenue. On the same July date this year, the elevator had only brought in $287,000 – or 17 percent of the revenue to date two years ago.
“Some of it will get made up,” Schaller said. But far from all will be recouped. “It’s something none of us have experienced.”
Layoffs in ag industries are inevitable, he said. There will not be a need for as many fertilizer sales people or grain buyers.
“I think you’re just beginning to see the rumblings,” he said. “There’s going to be belt-tightening that’s going to hurt people.”
Livestock farmers hungry for corn crops
Schaller predicted that livestock farmers will be scrambling to find enough grain for their animals.
“They are going to be in deep need for corn,” he said. “We traditionally have all the corn in the world that they need.”
But since corn has a longer growing season and can’t be planted as late as soybeans, far fewer acres were planted with corn this year.
Of the farmers Schaller had spoken with, the normal acreage planted in corn is about 2,400 acres. But this year, only 260 acres got planted – and 160 of those were by farmers who need the corn for their own livestock.
“I’ve got a list of cattle guys who need corn,” Schaller said. “I’m out there trying to find feed.”
Normally by this time of year, the corn stalks are towering in fields across the county. But this year, it’s a rarity.
“Everybody knows where corn is planted this year,” Schaller said. “We’re all trying to buy the same corn. We’re in a very unusual situation.”
And though the vast majority of local farmers have crop insurance, Schaller predicted that when winter rolls around, some may face hard times.
“Once the insurance payment is over, that’s the last income they will have for 12 months,” he said. “Are they going to be able to live on a substantially reduced amount of money?”
Brokerage businesses hurting
For 40 years, Steve Speith has been working with FC Stone Brokerage to help grain elevators market their crops.
“Our business is dependent on grain,” Speith said. So with fewer bushels to market, less revenue will be coming in.
FC Stone will weather this crisis better than many brokerage firms, Speith said, since the company has offices spread out across Ohio, Indiana, Michigan and Ontario.
“We won’t be impacted as severely as some of the local ones,” he said. “They have been hit really, really hard. I’ve never seen one like this.”
Unless this planting season is followed by a similar one next year, most farmers should survive.
“It may be a year in time till farmers can recover,” Speith said.
But unlike farmers, there is no safety net for this type of crisis for brokerage firms.
“They really don’t have that kind of insurance for the rest of the industry,” Speith said.
The far-reaching effects of this year won’t be fully realized for a while yet, Speith predicted.
“It’s hard to imagine that there are parts of the community that won’t be affected in some way,” he said.
Domino effect out of desperation
As farmers wait for crop insurance money, they need money to live on – leading to the return of supplies they couldn’t use this season. Some items have multiple year shelf lives, but some don’t, according to Steve Bateson, of Rosen’s, a distribution company supplying herbicides, insecticides and seed treatments.
“It’s a domino effect,” Bateson said. “It will take a while to get out from under this.”
The impact will be felt by businesses selling trucks, trailers and tires – and businesses that provide maintenance for tractors, Bateson said. It will be felt by the meat packing business, and seasonal employees who may lose their jobs.
“The middle man and the retailer are left at the mercy of the marketplace when something like this happens,” he said. “It’s difficult for smaller entities to get through this.”
But for farmers themselves, the safety net of crop insurance should work.
“I think most growers have enough reserves that we aren’t going to see a lot of farm sales,” Bateson said.
