Michigan farmers fear losses from spring rains, trade wars

Jonathan Oosting
The Detroit News

East Lansing — Michigan farmers already reeling from a soggy planting season are facing an uncertain fall harvest and fallout from President Donald Trump’s trade war with China that has depressed export prices for agricultural products.

“Pray for a late frost this year,” Monroe County farmer Doug Darling told state lawmakers Tuesday in a special hearing at Michigan State University. “That could make the difference and make or break a lot of farmers.”

Farmer Dave Williams, a fifth generation farmer, stands amongst the 2300 acres of soybeans on his farm in Elsie, July 9, 2018. Williams is also president of the Michigan Soybean Administration Board.

Michigan farmers were prevented from planting planned crops on more than 870,000 acres this spring, including 498,046 acres of corn and 349,481 of soybeans, according to new federal data highlighting the toll of heavy rains and flooding this spring.

Experts said the extreme weather prevented or delayed planting and will likely have a “long tail” with major ramifications for the Michigan economy, including food or product processors, suppliers and, eventually, consumers.

"I don’t think people realize and they won’t realize until they get to the grocery store this fall and their tortilla chips are expensive and they can’t figure out why,” said Clinton County farmer Stephanie Schafer. “Because there’s no corn to make them.”

Preliminary numbers from the U.S. Department of Agriculture show producers around the country were prevented from planting planned crops on 19.4 million acres so far this year.  That’s up 17.5 million acres over 2018 and the largest numbers reported since the department began producing the report in 2007.

More than 73% of the prevented plant acres were concentrated in 12 Midwestern states, including Michigan, where heavy rainfall and flooding prevented farmers from planting crops, particularly corn, soybeans and wheat.

“Prevented planting is huge this year,” said Joel Johnson, executive director of the Michigan USDA Farm Service Agency, which helps administer assistance programs.

Michigan farmers seeking various forms of disaster relief reported a 15-fold increase in the number of acres this spring they were unable to plant. Not all farmers have crop insurance, and those that do may have policies covering only a portion of their potential yields.

Farmers in Lenawee County reported an inability to plant planned crops on more than 86,000 acres. There were more than 40,000 acres of prevented planning in Monroe, Saginaw, Eaton, Shiawassee, Hillsdale, St. Clair and Clinton counties.

The “state of crisis” was caused by more than just historic rainfall, said Michigan Department of Agriculture and Rural Development Director Gary McDowell, who noted excessive snow, flash flooding and tornadoes that affected planting in some parts of Michigan.

Resulting shortages “have the potential to impact everyone in Michigan, not just our farmers,” he said, explaining that local producers that rely on agriculture to bring their own products to market. “No matter where you live in Michigan, we are all in this together.”

Trade war's front lines

Johnson told state lawmakers the Trump administration’s trade war with China has “had a large impact on Michigan farmers” despite a special assistance program designed to reimburse producers for “unjustified” retaliation by the foreign governments.

The U.S. Agriculture Department is expected to make roughly $14.5 billion in direct payments this year to farmers affected by tariffs, including corn, soybean and wheat producers.

For Michigan farmers, “exports to China have been an extremely large part of our exports over the last few years,” Johnson said.  “So having them cut back their purchases has had a large impact.”

The new farm subsidy program is “designed to help reduce the loss for the farmers” missing out on planned markets, Johnson said. “It’s not a full replacement. It can’t be. We don’t have money to fully replace that.”

United States Department of Agriculture Officials testify before a joint state House and Senate committee hearing at Michigan State University on Aug. 13, 2019.

China last weekend announced it had canceled all purchases of U.S. agricultural products. But Trump appeared to try to de-escalate the trade war on Tuesday as his administration delayed additional tariffs on Chinese goods.

“As usual, China said they were going to be buying ‘big’ from our great American Farmers,” Trump had tweeted earlier in the day. “So far they have not done what they said. Maybe this will be different!”

Tense negotiations with traditional trade partners like China, the European Union, Mexico and Canada have compounded uncertainty for producers hit hard by the spring rains, said Tim Boring, vice president of the Michigan Agri-Business Association.

“The market factors to inform 2020 planting decisions are largely in turmoil,” he said.

“We’ve damaged our trade relationships with our historically close partners here. A lot of these partners had sourced the majority of their production from the United States, but that’s not likely a position they’re going to put themselves in again moving forward.”

Darling, a sixth-generation farmer in Monroe County, thanked the USDA for implementing the direct payment Market Facilitation Program but urged lawmakers to consider the impact federal trade policies may have on the state.

“Farmers are the soldiers in this trade dispute,” he said. “We are on the front line.”

Crop outlooks

Darling typically plants roughly 1,600 acres of corn, soy and wheat on his farm but said he was unable to plant approximately two-thirds of his farmland this spring.

The rainy planting season is going to have a “far reaching” impact that lasts for years, he predicted, noting he did not have to purchase this season things like new parts from equipment dealers or additional fertilizer.

The scope of the problem may not be known until the fall, Darling said, warning that an early freeze could jeopardize what crops farmers were able to plant late in the year.

“Many of these plants are going to have difficulty maturing, or in some instances they’ll never mature at all,” he said. “Corn is just beginning to tassle. It’s just beginning to pollinate. It’s going to have a difficult time making it to maturity.”

Schafer, who runs a 300-acre dairy farm near Westphalia, said the federal government allowed her to plant corn as a prevent crop on land she couldn’t use for other purposes without jeopardizing insurance.

But the corn is only waist high as of early August and “will never mature,” she said. That means it will have lower levels of energy in the starch that her cows need to produce milk.

The state’s new low-interest loan program is “a great idea,” but dairy farmers facing their fifth year of bad prices may already be over leveraged and not able to qualify, Schafer said.

“So how do I buy corn? Is there going to be enough corn available to feed cows? That’s the concern. It’s a big question mark,” she said. “I’m just one farmer, a small farmer, with 300 cows. Can you imagine what these 1,000-cow guys are going through?”

Pig, sheep and other livestock farmers have similar concerns, said Schafer, a district director for the Michigan Farm Bureau board, where Darling also serves as an at-large director. 

Officials say farmers across the country also face additional long-term uncertainty because of climate change. Johnson told state lawmakers the USDA is reviewing data and the impact climate change is having on crops.

“There are going to be weather extremes,” he said, “and people need to do things to be prepared like for that.”