Thanks to a combination of increased commodity prices, favorable growing conditions and significant support from the federal government, most area farmers appear to have enjoyed a strong bounce back year in 2020 after years of lean times.
A newly released report from the University of Minnesota Extension and the Minnesota State Agricultural Centers of Excellence shows that median farm income rose to above $106,969 last year, more than twice the amount recorded in any of the previous seven years. The bounty was spread out around the market, as all types of farms saw net positive income for the first time since 2014. The positive outcome seemed far from certain in the spring or even into summer as markets were thrown into turmoil by the COVID-19.
Broader uncertainty and challenges are likely to persist for several years as the world economy recovers from COVID. Still, local farmers like Wheeling Township’s Keith Schrader are relieved to get a break after a lengthy spell of lean times.
“The money we made last year has really gotten us on more solid footing,” he said. “Over the last several years, it had been really tough to show positive cash flow.”
Farmers benefited from a strong rally in commodity prices as the year progressed, especially as COVID-related disruptions in supply were addressed. Government payments also helped make the year a success, accounting for 12% of gross farm income.
Local farmers benefited from increased yields after several rough years and saw key markets deliver. China made several major commodity purchases and trade relations with Mexico and Canada were bolstered by the U.S.-Mexico-Canada Free Trade Agreement.
Still, not everything is rosy. The report notes that farm income is expected to tick down by about 8% in 2021, mainly due to a loss of government subsidies. The $1.9 trillion American Rescue Plan recently approved by Congress includes no assistance for farmers.
In addition, farm operating expenses are expected to trend up as energy and input costs increase. While strong commodity prices may benefit crop farmers, they can be expected to trim into the margins of livestock, hog and poultry producers next year.
Rice County Farmers Union President Steven Read said that while many of the Department of Agriculture’s Economic Impact Payments” and other assistance went to large operations, smaller farmers were able to get a crucial boost from them as well.
Even without government support, Read said that middling conditions in South America along with a surprisingly robust return of export markets are cause for optimism. However, some farmers weren’t able to take full advantage of the rise in prices because they had to sell early.
Medford area dairy farmer Scott Balzer said that after years of middling prices, COVID and related shutdowns devastated his business as market demand dramatically shifted away from traditional buyers like restaurants and schools.
Fortunately, Balzer Dairy got back on its feet with help from COVID-19 Economic Injury Disaster Loan (EIDL) from the U.S. Small Business Administration. While markets have remained "choppy," Balzer said that improved crop prices along with internal changes to the business have helped to shore things up.
Even as things have improved, Balzer is still concerned about the overall trade picture. He said that the EU's move away from using U.S. dairy has played a key role in depressing dairy prices for years, and accused China of continuing to manipulate markets to its benefit.
Some pork producers, like Steele County Farmer Brian Keck, were hit especially hard by what the otherwise mostly sunny University of Minnesota report described as “once-in-a-lifetime disruptions for many of the state’s hog producers.”
As COVID-19 wracked many of the state’s meatpacking facilities during the spring, pork producers found themselves with hogs they struggled to get rid of. Keck was unable to sell his pigs to his traditional buyers and was instead forced to take losses that offset his gains on the crop side.
“If you’re just a crop farmer you probably did alright, but livestock took a bath,” he said. “We ended up breaking even for the year, and for a while we couldn't even get rid of our pigs.”
Fortunately, Rice County farmer Bruce Peterson noted that hog futures prices have risen to their highest levels in six to seven years. He noted that an outbreak of hog fever in China, known for its heavy pork consumption, has played a key role in boosting U.S. markets.
“Last year was a tough year for hog producers without a doubt,” he said. “But as we get into 2021, things are clearly looking much better.”
Waseca Public Health Director Sarah Berry has been chosen to serve on a new statewide committee on health and safety in the agriculture industry.
Gov. Tim Walz signed an executive order March 19 creating the Governor’s Committee on the Safety, Health and Wellbeing of Agricultural and Food Processing Workers.
“Agriculture and food processing are foundational to Minnesota’s economy and yet, workers in these industries face immense challenges, particularly regarding workplace safety, employment protections and access to safe housing, healthcare and transportation,” Walz said in a statement.
Berry is one of the committee’s 13 members that include representatives from the state labor and health departments, public health agencies, community organizations, food workers’ union and farmers’ organizations. Committee members will serve terms that expire in April 2023.
The committee will be co-chaired by Minnesota Deputy Commissioner of Workforce Development Hamse Warfa and Minnesota Agriculture Deputy Commissioner Andrea Vaubel, according to the announcement.
“This committee will remove barriers between agencies and bring community voices to the table,” Warfa said in a statement. “Our goal will be to ensure that the safety and wellbeing of our agricultural and food processing workers remains a top priority for Minnesota.”
According to the announcement, the committee’s objectives include:
Responding to the COVID-19 pandemic by coordinating resources and outreach for the 2021 planting season, and assist the Minnesota Department of Health, local public health departments and community organizations with coordinating the COVID-19 response
Create a strategy to use public, private and nonprofit compliance resources to promote the health and safety of agricultural and food processing workers, especially for housing, transportation and workplaces
Develop an effective communication system between state agencies, community organizations, advocacy groups, and agricultural and food processing employers and workers
Provide government agencies, community organizations, advocacy groups, employer and worker organizations, employers and workers with a forum to engage and plan for future planting seasons.
The Waseca County fairgrounds will see some improvements thanks to federal COVID-19 funding.
The Waseca County Board approved funding Tuesday for two projects at the fairgrounds. But during the discussion prior to the vote, commissioners grappled with how much money to give to the Waseca County Free Fair Board considering the county already appropriates money annually to the fair.
County Administrator Michael Johnson told the commissioners that they don’t have to cover all of the Fair Board’s repairs, but he pointed out that most people associate the fair with the county even though the county only owns the property and not the buildings at the fairgrounds.
The Fair Board received revenue from a few events last year, but didn’t receive revenue from a fair last year, Johnson said, adding that the fair also didn’t have its normal expenses last year either.
He noted that many of the repairs the Fair Board asked the County Board to fund should be ongoing maintenance at the fairgrounds. He suggested the county add a caveat to its annual appropriation that the money has to be spent on building maintenance.
“You’re trying to bite off 20 years worth of projects at one time,” Johnson said.
Commissioner Blair Nelson responded that the Fair Board has picked up “quite a bit” on the repairs it has completed in the last few years. Some of the repairs are to change items in a building to meet new requirements, such as a change in the health codes, he said.
The Waseca County Board approved Tuesday $44,000 for a roof replacement and $9,500 for improvements to the 4-H food stand. The County Board also directed the Fair Board to repair the gates at the fairgrounds, but didn’t include $5,000 to pay for the repair as requested by the Fair Board.
The money will come out of $200,000 the county saved as contingency funds from last year’s Coronavirus Aid, Relief and Economic Security (CARES) Act, but Johnson said he’s expecting the county to receive more funds in the American Rescue Plan passed by Congress last month.
Fair Board members appeared before the Waseca County Board in March to request financial help with needed repairs and commissioners asked them to provide the County Board with a “wish list” of repairs.
The Fair Board appreciates the county’s annual appropriation, but the buildings at the fairgrounds are aging and repairs are constant, Fair Board member Robin Dulas told the County Board March 16.
“We’re not Steele County level, but I think we have one of the best fairs in Minnesota,” she said. “We want that to be a good representation of Waseca County and what we do to bring people to the county.”
In addition to the roof replacement and 4-H food stand improvements, the Fair Board also asked for $4,000 for grandstand electrical updates, $6,000 for miscellaneous electrical updates around the fairgrounds, an unknown amount for an updated fair work vehicle, $2,000 for lumber repairs to a building, $3,500 for an air conditioning unit for the meeting room/nursery room during the fair, $8,600 to change the lights to LED at a building, $2,600 for a garage door and opener at a building and $2,000 for bathroom upgrades, according to the list.
The top priority for the Fair Board is the roof replacement and the remaining items could be done sometime in the future, although the county doesn’t have to fund all of the projects, Commissioner Brad Krause said.
“This is where we want to stick the dollars because this is a year-round property that we want to keep nice,” he said.
Commissioner Doug Christopherson pointed out that the county has loaned money to the Fair Board for projects in the past, which the Fair Board then paid back. The County Board has to decide whether it wants to give the CARES Act funds to the Fair Board or spend it elsewhere on county expenses, he said.
“I want to help them. I want to have a fair there, I want to have a nice fair. But that’s a big ask,” he said.
Commissioner DeAnn Malterer suggested commissioners consider whether the county is providing enough money annually for the Fair Board to maintain the buildings to serve the community year round. The county needs to be concerned about liability with the condition of the fairgrounds’ buildings because it owns the property, she said.
Nelson pointed out that the Fair Board could request funding in the Legislature’s bonding bill for infrastructure projects. He said he’s not advocating to spend money on “fluff” projects, but the Steele County Free Fair received state money for a major infrastructure project last year and other local governments in the area have received millions of dollars from the state for infrastructure projects while Waseca County gets passed over.
“Since I’ve been on (the County Board), the only thing I’ve discovered is that you need to ask for people to be aware … I think we’ve been very quiet at the county for too many years,” he said.
A Faribault businessman is suing Rice and Le Sueur counties, the city of Faribault and Steele and Waseca counties’ Human Services agency, alleging racial bias influenced an investigation of his former daycare center’s record keeping and led to unsubstantiated charges he’d defrauded the state of Minnesota.
Abdullahi Ali Hussein believed he was living the American dream.
At 20, he left his native Somalia for America. Six years later, he was swearing an oath of allegiance to the U.S.
By 2012, Hussein was a Faribault business owner, operating Lyndale Halal Market and buying Kids Avenue Learning Center, which he renamed Hyatt Daycare. The daycare was so successful that in 2016 he was operating a Minnesota Department of Education Early Head Start program out of the center and it became four-star rated. He joined the city’s Chamber of Commerce and took a seat on its board.
But that dream was short-lived. Hussein can pinpoint its end almost to the minute — shortly after 6 a.m. Oct. 5, 2017 — that’s when officials from the Minnesota Department of Human Services, Rice County and the Faribault Police Department first knocked on his door, serving a warrant to search his daycare center.
In the lawsuit filed late last month in U.S. District Court, Hussein alleges that the city of Faribault; Rice, Ramsey and Le Sueur counties; Minnesota Prairie County Alliance and DHS targeted his business solely because of his race and its reliance on public assistance benefits. The business, he says, was surveilled by investigators and that a camera was placed across the street from the center to try and catch him taking in fewer children than he was reporting in attendance.
According to law enforcement, a MnPrairie fraud prevention investigator noticed irregularities in Hyatt’s billing and approached Faribault police about the alleged deceit. MnPrairie serves as the Human Services department for Steele, Waseca and Dodge counties.
Hussein says the allegations were part of a statewide pattern in which Somali-owned childcare centers receiving state assistance were singled out and investigated. The following spring, a Minnesota Department of Human Services employee told state legislators that Somali daycare operators throughout Minnesota were defrauding the state and sending millions to fund terrorists overseas.
While the State Auditor couldn’t substantiate the claims, its report, released in March 2019, came too late for Hussein, who by then was dealing with criminal charges later dismissed almost out of hand by a Rice County judge.
Authorities, in the October 2017 search warrant, wrote that over a four-day period that July, State Bureau of Investigation agents found Hyatt Daycare over billed area Human Services departments for 63 children living in Rice, Le Sueur and Steele, defrauding the state of at least $1,500.
At the time, authorities said they suspected that was the tip of the iceberg.
Hussein alleges that the Human Services departments in Rice, Le Sueur and Ramsey counties and MnPrairie quickly revoked Hyatt’s participation in the state’s Child Care Assistance Program, which reimburses child care centers for caring for qualifying low-income children. Less than two days after the search warrant was executed, Hussein says his business was on life support.
Because 95% of the center’s clients were enrolled in the state assistance program, their parents withdrew them from Hyatt and found other providers.
According to the lawsuit, none of the defendants reviewed evidence taken during the search before revoking Hyatt’s Child Care Assistance Program authorization. An appeal wasn’t permitted, he says he was told by DHS.
“Defendants knew that revoking Hyatt Daycare’s ability to participate in CCAP would effectively caused Hyatt Daycare to close,” according to Hussein’s court filing.
He alleges that the revocation was planned, agreed to prior to the law enforcement’s search and that it was racially motivated with the intent to shut Hyatt down.
By the end of October 2017, Hussein issued a statement to the Faribault Daily News which read in part that “any claims of manipulation are simply false.”
In July 2018, Rice County prosecutors charged Hussein with fraudulently over billing the state for child care by $5,265 in July 2017.
In April of the following year, Minnesota District Court Judge Christine Long dismissed the case for lack of probable cause, finding documentation from investigators rife with problems: missing records, poor-quality surveillance video, records that didn’t specify the children attending and absent, and investigator errors and omissions.
The judge also noted that while some children were marked present when they were absent, the opposite was also true.
“The reasonable inference is that the parents or the teachers erred in recording the attendance, not that the defendant intentionally defrauded the [Child Care Assistance Program],” she wrote, latter adding that “When the state’s evidence is so lacking that there is not even probable cause to support certain elements of the charged crime, the defendant should not have to defend against the charge.”
Hussein is seeking a jury trial and an unspecified monetary award.
Each of the six defendants has 21 days to file a response with the court.