A Rice County farmer described economic problems farmers are facing and problems to the industry posed by the Trump administration’s trade dispute with other countries Thursday in testimony before Congress.
Mike Peterson, a fourth-generation farmer from Northfield, testified on the state of the farm economy during a House Agriculture Committee’s General Farm Commodities and Risk Management Subcommittee hearing.
“Strong soybean yields and fair prices had kept many farmers profitable until the trade disputes with China took its toll on the markets last year,” Peterson said during testimony. “Now our problems with oversupply are only getting worse.”
Peterson noted that in 2018, the median net farm income in Minnesota was at its lowest level in 23 years. He said this year is the sixth straight year southeast Minnesota farmers are growing corn at or below production cost. Most farmers he knows have lost equity, adding there has been an increase in Chapter 12 bankruptcies. He predicted if the situation does not change, more farmers will go out of business.
“The last five years have been incredibly challenging on my farm and on farms across Minnesota,” he said. “Market consolidation and the increase of monopoly power has caused our input costs to rise dramatically. Overproduction has driven commodity prices low — a situation that is further exacerbated by the impacts of ongoing trade disputes. Our current environment is unsustainable.”
Peterson expressed doubt he will be a profitable farmer under current conditions, although he has taken steps to try to stay afloat in the tough market.
“The reality is, despite all we’ve done to adjust to tight margins and low prices, there is just no way to be profitable with the market scenarios facing the American farmer today,” he said.
The Peterson farm includes nearly 800 acres of corn and soybeans. They own a welding and fabrication business and a golf driving range on their farm and were previously recognized as Rice County Farm Family of the Year.
Peterson testified how substantial agribusiness mergers have left farmers with fewer seed and fertilizer options, resulting in higher input costs. He also told the subcommittee how the trade wars have led to lost agriculture markets, costing farmers fair prices for their products.
“While I originally supported the goals of securing better trade agreements and holding bad actors accountable, the approach to these trade disputes has caused damage that I’m afraid will take us decades to overcome,” he said. “If policy makers are going to use our export markets as bargaining chips, they are either going to have to help us manage supply or keep funding the farm safety net. I realize that trade negotiations are tough, but American farmers can’t bear the weight right now.”
Subcommittee member Angie Craig, DFL-Minnesota, who helped bring Peterson to the nation’s captial, said in a press release that the county’s leaders need to listen to Minnesotan farmers.
“Washington needs to listen to family farmers like Mike, who are doing all they can to fight a trade war and make a living for their families,” she said.