Farming challenges: coronavirus adds to concerns

May 20, 2020

 


LC Scramlin is the third-generation to work the land on his family farm in Holly, Michigan, where he currently raises sheep, lamb and grows hay for feed. His brother, Marvin Scramlin, is a stone's throw away in Groveland Township, living and working on the family's centennial farm, established in 1910.

“My grandparents bought the farm in 1910. I'm the third generation farming it,” Marvin said. “Originally, it was 80 acres. They were all 80-acre parcels, because it was easy to divide them up into that amount. Grandpa kept buying up land (from other farmers) during the depression. It was 200 acres for years. LC and I bought it (the farm) from my dad in the 1970s.”

“My farm, the newer farm, is 49 years old,” said LC. “The two farmsteads, they're one-and-a-half miles apart. They were dairy farms for a long time. We sold our dairy herd back in '86. We had other interests, and at that time, farmers were facing excess milk production. It was a perfect time for us to sell.”

Now, LC farms over 1,700 acres of feed, which Marvin then sells at their feed store. In addition, LC is the general manager of the Oakland County Fair and runs the 4-H Club, a group of 50 4-H clubs offering educational programming designed to help youth gain the skills they need to be successful. LC also raises sheep and lamb, “about 65 ewes and 120 lamb, though now I'm going to cut it in half,” due to the coronavirus pandemic.

“We take them to shows, and sell and market them,” in order to promote breeding and growth, he said, which he explained “becomes a very big deal.”

Suddenly, they're having to turn to virtual sales, LC said, “which is a big change, in all areas of livestock. It's one of the ways to adapt to the times. Three months ago it never would have been considered.” Ohio, which has the biggest breeding sale, has now been postponed.

“One of the biggest local sheep markets, United Producers Inc., is in Manchester (Michigan). We took some animals down there (early in the coronavirus pandemic), and the check didn't come for several days, and we knew then something was wrong,” LC recalled. “There just weren't enough buyers for the meat.”

The wholesale meat market, which they sell via Wolverine Packing Co. at Eastern Market in Detroit, is beginning to come back, LC said. “It's one of the biggest lamb processors in the country. The  market has come back somewhat – just not completely. Wolverine is hoping to reopen soon – when they can get enough workers to show up,” noting Wolverine had only 50 out of approximately 1,000 employees show up for work recently due to illness and fear, resulting in farmers like him not being able to take in animals for processing.

And LC said lamb “has not been affected as drastically as the beef and pork industry. Those are scary kinds of numbers.”

Just down the road, his brother Marvin operates a grain elevator and their feed store, where since the pandemic, suburbanites from around the county and adjacent counties with acreage, or just a little plot of land in their backyard, have decided to grow their own vegetables and raise a few chickens.

“It's a whole new market,” Marvin noted.

Marvin also provides smaller farmers and horse farmers, of which Oakland County is the largest county in Michigan with horse farms, he said, with custom-blended feed.

“We make our own. We can make whatever people want,” he said, noting they do not try to compete with larger feed producers who are open seven days a week who purchase feed from giant manufacturers, such as Purina. “It's very hard to compete with large producers. I don't have a storefront. I'm still on the farm. I'm very, very fortunate. I have very loyal customers.”

However, Marvin said he doesn't think he could begin again as a farmer today.

“Just the changes in technology and equipment, the marketing and being online and messing with futures in the stock market. It's gotten very, very complicated,” he noted.

The definition of what is a farm, and certainly a family farm, has been evolving over the decades, as farms have grown and consolidated as business operations, and newer, entrepreneurial niche farms  have popped up as alternatives, with younger farmers at the helm.

“Nearly all the farms in the United States are family-owned, but they have gotten larger because of economic issues, such as regulatory burdens,” said Ernie Birchmeier, spokesperson, Michigan Farm Bureau. “Farms have been getting larger since the early 1900s. When profit levels are so small, the only way to maximize profit levels is to grow.”

Veronica Nigh, an economist with the American Farm Bureau, confirmed that, noting that in the 2010 U.S. Census, 99 percent of all farms in the United States “at least 50 percent or more of the operation was owned by one producer of the household and/or their extended family.” Of that, 90 percent are considered small family operations that have less than $10,000 in sales, according to the U.S. Department of Agriculture (USDA); 80 percent have less than $100,000 in sales annually; and eight percent have sales of $500,000 or more.

Large family farms, with at least $1 million in gross cash farm income, made up 2.9 percent of U.S. farms but accounted for 42 percent of the value of production.

“Agriculture is like other facets of the economy – it's gotten larger,” Nigh said. “To stay in business, to operate, it's more expensive, and you need more acreage to be profitable.”

“Regulatory burdens and environmental controls add tremendous costs to farming today,” Birchmeier said. “When you have additional costs, you need to spread it over more units. There are many hidden costs that add up. There are added costs to transportation, to get to the processor and then to the retailer.

“Agriculture is a price taker, not a price maker,” he explained. “Depending on what the market says it will pay that day, versus on the other end of the spectrum where the retailer says the price you will pay.”

 Nigh said, in the U.S., unlike in other countries, such as China, “Only one percent of farms in the United States are owned by non-family held corporations.”

Marin Bozic, a dairy economist at University of Minnesota, said consolidation at dairy farms into larger operations is not a new phenomenon, but one that has been taking place across the country since the 1950s.

“We see consolidation at about five percent a year less than the year before, through natural attrition, people retiring, their children wanting to pursue a different career,” he said.

“The original family farm was mom, pop and their kids,” he said. “Then, there was a hired hand, then, a couple of hired hands. Then, the son had a farm, and that joined the family farm, and soon there was a couple hundred head (of milking cows).

“When you get to a 3,000-head dairy farm, that's when you get to universal savings,” Bozic said. “They're managing 30, 40 employees. They're still a family farm, but with a different structure (than the original mom and pop form). They're not Walmarts or corporations, like in Asia, where there are dairy corporations. They're still a family business. Once you learn how to manage a business, you're just managing a bigger business.

 “We shouldn't denigrate a dairy farmer who has the ambition to produce food at a large scale,” Bozic said. “In some sense, they're an entrepreneur. Americans like dairy, they like cheese. These farmers have figured out how to produce it effectively. They have their manure in careful lagoons. There are environmental laws that are stringent, and they follow them. They are producing food.”

Not everyone agrees that large dairy farms are effective producers and good neighbors.

“Industrial agricultural is this nation's problem,” said Jaydee Hanson, policy director, Center for Food Safety. He said there are areas in the country with farmers with 140,000 head of dairy cattle in areas with no water, “so you have to use groundwater or import it.”

A further challenge for the environment, he said, is “when you have 140,000 head of cattle you have to get rid of the waste someplace. You have this fetid mess. They're basically low-level sick all the time and kept on antibiotics to keep them healthy enough to gain weight to make milk, or if they're beef cattle, to grow for meat operations.

“Then, you have in theory and in practice, compost that can be used in agricultural land,” Hanson said. “But the runoff – even in the driest areas,” running off into produce fields.

Hanson said this form of tainted runoff, from cattle feces, is what caused E-Coli breakouts in romaine lettuce in California and Arizona in 2018 and 2019.

Another issue is with dairy alternatives, such as almond milk, where almond growers in the San Joaquin Valley in California, where the majority of almonds are grown in this country, flood fields with water, allow the fields to dry out, and then flood them again – using rare and valuable water in a state frequently plagued with drought conditions. The increased demand for almonds and its milk substitute has heightened the market for almonds, and growers are expanding the number of trees they are planting over other crops.

“They are all trying to use drip irrigation because water is much more valuable and regulated,” Hanson said. “While they use water in a very limited supply, the growers are trying to do a better job.

“When so much of your landscape is in nuts, it's crazy – it's all in one crop,” he said. “It means that 40 percent of the nation's bee hives have to go out there because they all bloom at the same time. You end up with a product. It's a mega-farming operation.”

He noted that if it were wiped out by something in the natural world, the industry would be destroyed.

Today, according to the American Farm Bureau, there are about six million farmers across all 50 states farming 2.42 million acres. Since the Industrial Revolution, “farms have gotten larger and consolidated as workers moved from rural areas to urban areas,” Nigh noted. “That continues today.”

The USDA in 2019 reported the average farm was 438 acres.

“In 2012, it was seven acres larger,” Nigh said. She also reported that between 2012 and 2017, the country lost 67,000 farms.

“While we mourn every loss, it's generally a gradual loss,” she said.

“Where policymakers get concerned is where consolidation rises above five percent annually,” Bozic said, noting that in 2019 in Wisconsin and Minnesota, over 10 percent of dairy farms closed.

“When you go from five to 10 percent, it's more than retirement,” Bozic continued. “You're losing some 30-year-olds, 40-year-olds, who didn't make it. They had to sell their cattle and their equipment. That's what's heartbreaking.”

Both  Nigh and Birchmeier pointed out that while many farms have grown exponentially, some farms have chosen to stay small.

“There are also situations where some farmers have chosen to stay small and focus on the niche market, and market directly to consumers, and that works also,” Birchmeier said, of farmers who grow for farmers' markets, home shares or for farm-to-table restaurants.

“In the last 10 years, there are more small farms of 100 acres or less and larger farms of 500 acres or more. It's the middle that is squeezed, like other segments of the economy,” Nigh said. “We tend to see new farmers in smaller farms who have less capital. They're farming small heads of livestock, or being small producers of high value product. The larger acreage farms tend to be more mechanized which is why they can have more acreage. Technology has helped drive size and profitability.”

Agriculture is a $104.7 billion industry for the state of Michigan, according to Michigan's Department of Agriculture and Rural Development (MDARD), employing 17 percent of the state's workforce and putting it third behind manufacturing and tourism in importance as an industry. Every $1 in export activity generates another $2.87 in economic activity, meaning Michigan’s total agriculture exports of $1.98 billion have a local impact of an additional $5.6 billion, MDARD said – creating tremendous economic benefit for the state's economy.

In addition, off the farm, an additional 17,065 jobs are created in food processing, storage, and transportation, MDARD said.

“One in every four or five jobs are tied to agriculture, from farming to production to processing to retail,” Birchmeier said.

The state of Michigan is second only to California for the diversity of its agricultural production. Michigan is number one in dairy, Birchmeier said, and number two in the country for corn, soybeans, beef, pork and eggs. Michigan is also among the leaders in tart cherry production, blueberries, bedding plants, Christmas trees, sugar beets, asparagus, lumber, apple and fruit trees, and nurseries.

“Livestock, including dairy, has the greatest economic impact at $5.13 billion, followed by field crops with an economic impact of $5.12 billion,” MDARD reported.

Oakland County has one last working dairy farm, Cook's Dairy Farm in Ortonville, begun in 1933, and now has a hormone-free herd of 50 milking cows. Over the years, they added a processing plant and not only sell milk wholesale but also ice cream, ground beef and half and whole pigs, by reservation. Consumers can come directly to the farm and purchase their dairy, beef and pork.

“We are blessed to have a very diverse agricultural state,” Birchmeier said.

And then COVID-19 hit, and along with the rest of the world, the agricultural industry and consumers' ability to access merchandise, has been significantly impacted.

On March 10, Michigan recorded its first two cases of COVID-19, and by March 16, restaurants around the state were closed, other than for take out. On March 24, Governor Gretchen Whitmer issued her first stay-at-home order; it has since been extended until May 28.

Similar orders occurred around the country – and farmers around the country suddenly had no where to sell their produce, beef, poultry and pork.

Last year, Americans ate 51 percent of their meals outside of the home. And while Americans are suddenly eating all of those meals at home now, it turns out there are two separate supply chains in the United States – one for consumers and retailers, and a separate one for restaurants, schools, universities and cruise ships.

“For those growers in the food service industry, they saw their demand disappear overnight,” Nigh of the American Farm Bureau, said. “The crisis is causing significant pain across the United States. The prices paid to ranchers and farmers have dropped across the country, despite empty shelves at stores.”

Nigh said it is not easy for those growers who sell and process to the food service industry to transition to the retail market because they utilize different supply chains.

“So those growers have no where to sell their produce. Those fruits and vegetables are often picked by hand, with a significant cost,” she said, which is why she said there are reports of farmers just plowing fields over in some states, because it is less expensive to just plow the fields than pay to have them picked and just rot.

Each day, dairy farmers are dumping thousands of gallons of milk away as they have no where to sell it. The nation's largest dairy cooperative, Dairy Farmers of America, said they estimate that farmers are dumping as much as 3.7 million gallons of milk each day. Eggs are being smashed by the dozens.

“There is a parallel system to the retail food system that is completely shut down,” said John Ickerd, professor emeritus of Agricultural Economics, University of Minnesota. “The food supply chain is essential, but more than half of  food expenditures are at restaurants, schools and other entities that are now closed down. With our specialized food distribution system, even those (processing) plants that are still operating, there is no way to get product there. Maybe dairy farms are throwing out milk because it's scheduled to go to restaurants and schools versus the retail side. If you are a pork or meat processor, you have no where for the meat to go.”

Ickerd explained that once there were poultry, meat and pork producers, packers and processing plants – all separate. Today, he said, large operators, like Tyson and Smithfield, own the operators and specify what they want produced.

“It was first seen in poultry, where they moved to contractural operations, where they actually contract or own the produce, like Tyson or Purdue,” he said. “Initially they would just contract with the producers. The producers were responsible for getting rid of the waste. They would build buildings, borrow money, everything to the specifications.

“Previous to that, you would have livestock and poultry producers who would bring their product to open markets,” he said. “So packers would bid for their products. When you went to this contractural model, they could specify the model of animal, what they wanted, what they are to be fed, what they're to be housed in.

“Before, there were separate producers, packers and processing plants. Now, there is nowhere to go with a truckload of animals.”

Ickerd said 100 percent of chickens in this country, save for a few free range chickens, are produced this way, 95 percent of hogs, and a majority of beef cattle.

“Oversupply has been a chronic problem,” Ickerd said. “Then they would reduce the price to the suppliers, and that would move it through the market, with prices falling to consumers.”

But, Ickerd said, “What they never anticipated was a breakout of a disease like this – that there would be a percentage of workers out sick with this disease. You'd reduce the volume of output, but because of the nature of this disease, when they get to a certain percentage, they had to close down the entire plant rather than having some absenteeism. The producers never expected this kind of contagion.”

With dairy and beef cattle, in particular, he noted, they still must be fed, and with dairy cattle, they have to be milked on schedule, and for all of these animals,  “there is no longer an open market, and no way to move them to another place. They're built like an assembly line.”

“We have some real concerns with the supply chain,” said Ernie Birchmeier of Michigan Farm Bureau. “Thirty percent of the pork processing plants are shut down right now; 25 percent of the beef processing plants are shut down, and there are interruptions in the poultry and lamb processing industries as well, because of the virus and testing issues among workers.”

On April 28, President Trump signed an executive order ordering meat processing plants around the country to stay open to head off shortages in the retail sector. Yet, by May 6, seven additional meatpacking plants had closed as at least 9,400 workers in those plants had gotten sick with COVID-19, and at least 45 workers had died.

A spokesperson from Tyson said they are working to keep their workers safe. “We've been screening worker temperatures, requiring protective face coverings and conducting additional cleaning and sanitizing. We've also implemented social distancing measures, such as workstation dividers and more break room space.”

Locally, Kroger stores have signs indicating shoppers had to limit their purchases of meat and poultry to two per visit; Costco was limiting shoppers to three per visit. Numerous stores had empty poultry and meat counters.

Representatives from Kroger and Plum declined to comment for this story on shortages in their supply chain. Numerous calls to Meijer, Papa Joe's and Nino Salvaggio were not returned.

“We've got ample supplies, huge supplies. The bottleneck is in packing processing,” said David Anderson, economic professor in the Department of Agricultural Economics, Texas A&M University. “What that means is higher prices for consumers.”

But not higher prices for farmers.

“We're very concerned about the financial impact it is having on farms across the state,” Birchmeier said. “Prices paid to pork farmers is down 50 percent since the crisis; beef is down 30 percent; and prices to our dairy farmers is down 30 to 35 percent – and projected to go down more. I don't care what business you're in, you can't sustain losses like that for very long. If this doesn't turn around soon, it has the potential to be as bad as the '80s.”

One bright spot for both farmers and those who have suffered economically during the coronavirus crisis is the partnership between the American Farm Bureau and Feeding America, to marry the oversupply of food from the restaurant food supply and the tremendous demand at the nation's food banks.

“We're hearing reports of 40 percent to 100 percent increases in need from food banks,” said Veronica Nigh at American Farm Bureau. “The last thing farmers want is for their products to go to waste.”

Dr. Phil Knight, executive director of Food Bank Council of Michigan, of which Gleaners and Forgotten Harvest are members, said their members are currently delivering 40 percent more food than a year ago at this time. He said the job of the Food Bank Council is to get resources to their member food banks.

He said there are two significant populations they are seeing. “First, when schools were closed, we saw children and families, the most innocent population. Then, we're seeing more senior citizens, the most vulnerable population.”

He said along with Michigan Department of Health and Human Services (MDHHS) they have developed a senior quarantine box, filled with high nutritional shelf staples, building them at their warehouses, and then with partnerships, delivering them to seniors' doorsteps.

There has been a third wave of those in need – people who are gig and contract workers, service industry workers and those who have worked for small businesses.

“We've seen them in waves,” Knight said. “These waves keep waving over us like ocean waves coming and going back. Our networks are just delivering and delivering.

“Before all the schools closed, our network average of seven food banks in 83 counties in Michigan delivered 439,368 pounds of food in one week,” he said. “In the first week of May, just six weeks later, they did 741,080 pounds of food.”

In nine days, Knight said, they crafted a memorandum of understanding with the state to procure shelf staples, working with the Michigan Emergency Operations Center, MDHHS, the Attorney General's office and the Michigan Department of Technology, Management and Budget.

“Everyone had to sign off in nine days – after our supplier went out of business,” he said. “Luckily, Meijer agreed to resource it, with food they're donating to the state at their cost. “This agreement is a first-of-a-kind.”

He said Feeding America Network, their national organization, is using their model. “Michigan was the model. This meant that we kept food flowing to the three waves of people who needed it. We pulled off a miracle.”

Unlike with a natural disaster, like a tornado, “When a hurricane or a tornado touches down, you can see the damage. With COVID, you can't,” Knight said. “Also, when a tornado hits Tupelo, Mississippi, it's only Tupelo. Here, it's statewide. The problem with dairy isn't going to be fixed until schools and restaurants are re-opened. If there was any way to stop the food waste, these farmers would.”

The next project, which Knight was working on at this writing, Coronavirus Food Assistance Program (CFAP), is a new USDA program designed to help farmers, spending $300 million in a month. The USDA is to buy $100 million worth of produce, $100 million in protein and $100 million in dairy.

“The distributor has to sign up people who deal with emergency food, like food banks, then these food distributors sign up food banks as clients,” Knight explained. “Then we give them our orders from those three categories. Now food distributors have to put bids together, and then they submit it by May 1, and in one week, from concept to implementation, to award the federal contract on May 8. These boxes are supposed to be hitting the communities May 15 – three weeks, start to finish. Truck-to-trunk model.”

A government program in three weeks? As Knight said, “Hope springs eternal.”

As for farmers and their ability to survive and weather the pandemic?

“We will have short-term challenges, but of any country on earth, the U.S. is best situated to provide food,” said University of Minnesota economist Marin Bozec. “We will have plenty of food for our citizens.”

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