Soybeans are a livelihood for Michigan farmers like Doug Darling. His farm is a story of survival in these tough times.
MICHIGAN — Michigan’s soybean farmers are feeling a crunch of providing a critical crop during a time when the pandemic, lacking federal bailouts and tariff wars stress their production.
The Midwest accounts for about 75% of the country’s corn and soybean products and local farmers are uncertain of their futures, they say. Their livelihood is at the center of a national political debate.
President Donald Trump’s tariffs have been met with admonishment by some high-profile Republicans, such as Majority Leader Mitch McConnell and Rand Paul. Sen. Joni Ernst, of Iowa, is running in a close 2020 race and said just last year: “We don’t think it’s a smart way forward.”
In Michigan, “Agriculture in general at this stage is struggling,” Michigan Soybean Promotion Committee Executive Director Janna Fritz told The ‘Gander.
Soybeans Serve a Major Purpose to Michigan Farmers
In 2019, Michigan ranked 15th nationally for soybean production and 10th nationally for the price to farmers, according to Fritz.
Soybeans are Michigan’s third-largest commodity, behind dairy and corn. In 2018, the crop value to Michigan was approximately $941 million.
“In our state, in terms of production and value and when we’re talking just about crops, (soybeans) would be No. 2,” said Theresa Sisung, field crop and advisor team specialist at Michigan Farm Bureau— the state’s largest general farm organization that operates on memberships and also has an insurance company. “Corn is king. It has the most production and usually the most acreage. Soybeans are right up there.”
Sisung, who operates out of Lansing, helps bureau members grow corn, soybeans and industrial hemp, keeping them abreast of new industry trends and innovations. Previously, she oversaw research and marketing for 10 years at the Michigan Corn Office.
She said that in Michigan, the majority of soybeans are harvested to feed livestock like cattle, chickens, turkeys and pigs.
Tariffs Fluctuate and Put Farmers in Middle
Fritz described the 2019 calendar year as “very challenging” due to heavy rains early in the season, preventing a large portion of crop planting. She described it as a cyclical part of harvesting but acknowledged that “implementations could be felt long term.”
But before last year’s natural elements impacted local crops, President Trump and his administration prioritized trade agreement renegotiations starting in 2018.
On March 1, 2018, 25% tariffs on imported steel and 10% tariffs on imported aluminum had a domino effect: both corn and soybean prices trended downward immediately after the tariffs were implemented.
About a month after the Trump administration’s announcement, China announced over 100 products that would receive a 25% import tariff, including soybeans. However, volatility in corn and soybean prices reached stability in May due to renegotiations like the North American Free Trade Agreement, or NAFTA.
That didn’t stabilize, though, as Canada, Mexico and countries part of the European Union retaliated against tariffs imposed on them. From late May to mid-June in 2018, corn and soybean prices dropped about 11% each during a three-week period.
The back and forth continued, especially between the U.S. and China. In August 2019, China announced an added 5% tariffs on soybeans.
‘Huge Headways’ Made but Bigger Rebound Anticipated
“We all work really hard, whether you’re a Michigan farmer or an Illinois farmer or you’re a farmer in Brazil,” said Doug Darling, a well-traveled farmer and the Michigan Farm Bureau Board of Directors director at-large.
He, along with his parents, Elgin and Joanne, is a partner at Darling Farms—a sesquicentennial farm in Monroe County part of the family since 1833. Darling is a sixth-generation farmer, while his son, Dayton, is seventh generation.
The farm sits on about 1,600 acres, harvesting corn, soybeans and wheat. Another custom 300 acres is utilized for other farmers to plant and manage. Within that 1,600 acres, about 700 of them are dedicated to soybeans—the largest portion of custom farming this year.
Darling said American farmers have a lot more bushels than the world needs—approximately 5 billion bushels of soybeans on a global scale.
He recalled being in Seattle in 1999 for World Trade Organization negotiations, witnessing turmoil in the streets. Fast forward to around 2009: He said for a three-year period commodity prices were the highest ever experienced—profit margins were “more than we’ve ever seen.”
Money went into new equipment and land. Young farmers came out of college with “great expectations” to continue to positively affect the industry.
“We have made huge headways in agriculture the last three years with some of these trade deals that have gotten renegotiated. … To get China to the table to negotiate and get these Phase Ones, it’s huge for the American economy and it’s huge for the farmers in our country.”
He said the next steps involve renegotiating bilateral and multilateral agreements with Europe, specifically the United Kingdom in a post-Brexit economy.
Fritz said farmers currently are not making much money, but that’s the culture of the agriculture industry. She said tariffs have “essentially pushed our price point down,” with inputs remaining normal while the cost of returns has decreased.
“We are in a multi-year low-price level for soybeans,” Sisung said. “We thought we’d see a little bit of a rebound with the trade agreements.”
Pandemic affects demand
COVID-19 has thrown another wrench into the industry.
“When folks aren’t going to restaurants, they’re not consuming as many fried foods in a restaurant context, so oil utilizations are going down,” Fritz said.
In April of this year, Farm Bureau reported that of funds eligible through the original federal Paycheck Protection Program, amounting to approximately $349 billion, the money was gone in about two weeks but had little effect on agriculture. Instead, money bailed out large corporations.
It was believed that self-employed and independent contractors, like farmers, were less prepared to apply for such loans, and that access to lending institutions was a struggle.
“It was a little bit of a challenge in rural America,” Sisung said, adding that the Food Assistance Program helped their cause. “I think banks got overwhelmed by those who wanted to apply. The farms that didn’t have a close relationship with their bank made it a little more challenging.”
Sisung said a decline in prices in almost all agricultural crops and products has occurred due to supply chain challenges.
“Part of it is, when COVID hit—depending on where you’re at in the country—a lot of the seed was purchased, inputs were purchased,” Sisung said. “Farmers, if they were able, were going to plant their crop because they had money. On the farmers themselves, they’re day to day. It didn’t necessarily have a huge impact.”
Biden sows connections with farmers across the nation
Democratic presidential nominee Joe Biden has made strides as part of his platform to address inequities in rural America, notably agriculture’s economic and cultural significance in states like Michigan.
As of July, Trump led Biden by 9 points when it came to rural voters, with Biden closing the gap compared to the same demographic in the 2016 election. The Democrat was recently endorsed by the United Farm Workers.
Biden’s campaign platform vows to strengthen the agricultural sector by reexamining trade agreements and working with allies; expanding a micro-loan program for new and beginning farmers, by doubling the maximum loan amount to $100,000; allowing farmers to negotiate their own prices by forming regional supply chains; and reinvesting in land grant universities’ research so public entities and not private companies own patents.
Corporate agriculture could be the shift between either presidential candidate when it comes to rural voters this November, with one poll showing that 80% of rural voters reject agricultural monopolies and factory farms.
Farm bailouts last year, which were designed to offset tariff effects, were shown to benefit the richest farmers.
Rural America Fund, a nonprofit organization that advocates for policies that benefit agriculture and rural America, is administering steering committees in Midwestern states. The nonprofit “supports free and fair trade that benefits U.S. agriculture and supports the rollback of tariffs and retaliatory tariffs.”
A ‘resilient’ attitude
Sisung said that according to the U.S. Census, the total number of farms decreased between 2012 and 2017, from about 52,000 to 47,600. Part of it is generation, with the age of farmers “ever increasing.” Meanwhile, another generation doesn’t always automatically take the baton.
“We’re seeing that number of farms decline,” she said. “The land that is farmed also is declining. We’re typically seeing farms get a little bigger as farmers choose to retire.”
Fritz said even urban connections to farming are dwindling, which has accelerated outreach. She noted how Michigan is second only to California in terms of agricultural diversity based on commodity makeup.
“As a whole, we are resilient as farmers,” Fritz said. “We have to be; we have to start again the next year no matter the previous hand dealt to us. … There’s no place I’d rather be than on our family farm. I’m privileged to represent the farmers in our soybean association. It’s great people—a great industry in general—that are really down to earth and dedicated to serving others through food.”
Darling said optimism is part of a farmer’s mindset. He has talked to dairy farmers, many of whom have struggled or exited operation in the Midwest.
Meanwhile, some farming operations continue to get bigger and equipment is getting larger. There is an admitted challenge when it comes to the workforce, in terms of interests and knowledge and skill, as intensive labor can be just as daunting as market prices.
“The bottom line is, you’ve got 7.8 billion people on this planet,” he said. “It doesn’t matter what country you are or what religion you are. You wake up tomorrow and you want to eat. You need people to buy it first.”