Minnesota farmers hopeful, though losses continue amid coronavirus
CBS News is chronicling what has changed for the lives of residents of battleground states in 2020 amid the coronavirus pandemic.
Hog farmer Mike Patterson has managed to survive the closure of meat processing plants due to the COVID-19 pandemic earlier this year, but the economic outlook remains bleak heading into the fall and potentially into next year.
Patterson, who is part of a co-op with about a dozen other families near his farm in Kenyon, Minnesota, said in June that his co-op was forced to euthanize some $500,000 in pigs. But business is looking up. He has sold 600 pigs to local butcher shops, which is "excellent," and he's no longer exterminating hogs.
But Patterson still worries that there will be a backlog of pigs heading into the fall due to meat processing plant closures earlier this year. He had scheduled deliveries earlier this spring to The Smithfield Foods, Inc. meat processing plant in Sioux Falls, South Dakota. The plant temporarily closed because of a COVID-19 outbreak at the plant but reopened weeks later, after the Centers for Disease Control and Prevention (CDC) and U.S. Department of Agriculture (USDA) found it to be in compliance with health and safety standards.
Pig prices have been low for most of the summer, and Patterson expects to lose money until next spring or summer. Based on the current prices, he can sell a hog for around $110 to $115, but the cost of raising and processing pig sets him back $135 to $140.
"We're looking at a lot of red ink from now until next summer," Patterson added. "So, really, we're looking at, you know, 10 months before you get into the black again."
"When you're losing the money, when you're, when you're slapping a thirty-dollar bill on every pig you're shipping out the door, that's not as near as much fun."
In June, CBS News spoke with hog and soybean and corn farmers in Minnesota about the impact of the coronavirus pandemic. Farmers talked about the financial strain they were under, and while some meat processing plants and ethanol plants have reopened, others said they still expect financial difficulties.
The Minnesota Department of Agriculture awarded over $208,000 to 46 Minnesota livestock processing plants and producers to help farmers navigate supply chain issues. Thom Peterson, Minnesota's agriculture commissioner, said one bright spot during the pandemic is that Minnesotans have bought more local products. Peterson said there is some "optimism" among farmers in the state, especially since the state isn't euthanizing hogs anymore, but said the "damage is done for a lot of farmers" because prices are still low.
"We will lose some farmers this year, especially, you know, some are just — will just decide to quit, and that's too bad," Peterson said.
For Minnesota's soybean and corn farmers, ideal weather has led to a good crop. Jamie Beyer, a corn and soybean farmer in Wheaton, feels "optimistic" since she said she's seeing soybean and corn prices rise — though prices remain at "2007 levels." Beyer added her optimism stems from recent soybean and corn purchases from China.
"In farming — just like a stock — ... you don't get your profit 'til you sell," Beyer said. "The prices [are] good now and certainly people will hedge their crops and sell it, put into contracts ahead of time and whatnot. But, you know, we're — we're certainly always looking for stronger, stronger prices."
In June, Robb Schoenbauer, a soybean and corn farmer in New Prague, Minnesota, could not sell his products to the local ethanol plant for nearly two months due to plant closures. Now, the local ethanol plant is operating, but Schoenbauer said that prices remain low.
Schoenbauer was grateful that his local plant for reopening because "[prices] would probably be even worse if they weren't" operating. He's concerned about a second coronavirus wave this fall and cautioned against a complete shutdown of businesses if that occurs.
"I think a complete shutdown of everything is not really a viable option," he added. "But I do think people have to take every precaution that they can in order to allow these businesses to stay open, to, I think, be responsible and realize that you're not only affecting yourself, but also others around you and also the economy overall based on your actions."
Patterson encouraged Congress to pass an indemnity program for reimbursing farmers who have had to euthanize hogs. Both Patterson and Schoenbauer want free trade agreements that would allow them to compete on the global stage. Specifically, Patterson said he's "missed the best opportunity of my career" due to the tariffs that have prohibited his farm from selling pigs to China after their pigs were decimated by African swine fever.
"There was a huge opportunity to, to provide, you know, the Chinese people with pork from the U.S., and we just missed it because of politics," he said.