Weather, trade and other overseas factors have made this a rough year for many Pennsylvania farmers.
“We have a large variety, from dairy to grain, to fruit and vegetables, and livestock, pigs and beef,” said Ed Rising, president of the Indiana County Chapter of the Pennsylvania Farm Bureau.
Between the Amish community and regular farmers, Rising said there are over 2,000 family farms in Indiana County, ranging from 10-acre vegetable gardens to grain farms covering 1,000 or more acres.
Tariffs are an issue, even if a farm doesn’t send its product overseas.
“Our export market, just in general, is one of the biggest concerns because that is a very large part of the overall farm economy,” said Andrew Kimmel, whose family has 1,800 acres straddling the Armstrong-Indiana county line near Shelocta.
“In our area not a lot of soybeans get exported,” said Andy Fabin, whose family grows 3,500 acres of corn, soybeans and some wheat in lots across Indiana County. “But because soybean exports have been so stressed for the past year, the commodity prices have fallen.”
Kimmel also grows corn and soybeans, as well as “a few small grains … like wheat and barley,” adding, “we have a beef feed lot where we finish cattle for market. We finish a couple hundred head a year.”
China announced last month that it would increase tariffs on $75 billion of U.S. goods in retaliation for levies planned by President Donald Trump.
According to Bloomberg News, that included an additional 5 percent tariff on soybeans and 10 percent on American pork, all as of Sunday.
“China is our largest trade partner,” Fabin said. “In 2018 China purchased about 60 percent of the U.S. soybean crop.”
He said it hasn’t put his family’s operation into the red, but there have been “razor thin” profit margins.
“There are quite a few acres of soybeans in the county,” Fabin said. “On a yearly basis we’re buying and processing a million and a half bushels grown in Indiana and surrounding counties.”
Fabin grew up on the farm, then went to college and graduated in 2008, and worked off the farm until returning two years later. His father owns the farm and he works with his sister and “quite a few employees.”
Kimmel said he’s a fourth-generation farmer, active for 30 years, while “my son would be the fifth generation.”
Rising said the Fabin family’s Homer City area production facility provides soybean oil as well as soybean meal for poultry and dairy cattle feed.
“It stays here in the state of Pennsylvania,” Fabin said. “Our customer is a chicken integrator and all of their production remains domestic.”
Rising said a plant in Clearfield is processing ethanol and DDGS, or dry distiller’s grain with solubles.
Pennsylvania Grain Processing LLC said it strives to support agriculture by purchasing up to 40 million bushels of grain each year, producing 110 million gallons of ethanol and 330,000 tons of DDGS.
“Before you had to ship it to Ohio or Virginia,” Rising said.
Kimmel said he has to import corn and soybeans from Ohio and Michigan to feed livestock.
He said there is far less demand for shipping soybeans from the northern Midwest to China, “versus what they’re worth in Lancaster as a feed. It’s the overall demand that makes a difference.”
Meanwhile, farms across the U.S. are taking the brunt of retaliatory tariffs placed on their products, according to a Knowledge Exchange report released by CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, as quoted by the website dairybusiness.com.
“Soybean exports to China decreased dramatically because of the retaliatory tariffs, and consequently, the prices dropped,” according to Dr. Claudia Schmidt, an assistant professor of agricultural economics at Penn State University. “Even if you are a small farmer and you don’t believe you export much, you’re still impacted by the price decrease.”
She said the biggest concern is that an interruption will lead importers to switch to other countries.
“The trade war cannot go on forever,” Fabin said. “I am hopeful we will reach an agreement with China.”
Indiana County’s congressman, U.S. Rep. Glenn Thompson, R-Centre County, said he is taking a hopeful stance from his seat on the House Agriculture Committee and his position as ranking minority party member of that committee’s General Farm Commodities and Risk Management subcommittee.
“Farmers in Pennsylvania and across the country have continued to experience hardships in recent years, most recently with declines in exports to China,” Thompson said. “However, these negotiations are ongoing and I am hopeful a deal will be secured that provides for increased exports to Chinese markets. There are a billion mouths to feed in China and that provides the administration some leverage and great opportunity for Pennsylvania’s family farms.”
In the meantime, U.S. soybeans are going elsewhere.
“We’ve made great strides in the past year in opening up markets in Europe, the Middle East, North Africa, Indonesia (and) Southeast Asia,” Fabin said.
In turn, China has found partners as well outside the United States. Rising noted the market for dairy exports, such as cheese, butter and powdered milk.
“As they cut back on their purchases, there’s the European Union or some other country that could supply it, or Australia,” the PFB Indiana County president said. “Our production is still continuing, the cows can’t be shut off.”
During the winter months, Kimmel said, he’s watching the weather in Brazil, which has become the No. 2 producer of soybeans.
“Brazil is a big competitor,” Kimmel said. “A year ago when President Trump decided to use tariffs, the grain supply in the world was about average.”
That has changed, especially in Europe and in South America.
“(South America) has had an excellent season producing both soybeans and corn,” Kimmel said. “They have been setting records on their bumper crops, and Ukraine has had a bumper crop of grain that China can import.”
Kimmel said that lessens China’s need to negotiate an agreement with the U.S.
“Because of the lack of demand from China and the increased supply South America has had for the last year, China is holding all the cards,” Kimmel said. “Anything Mr. Trump thought he had, China has been able to work around that.”
Fabin said the U.S. agriculture industry is committed to open and free trade.
“It is important that trade channels remain open,” he said. “The world continues to need our product.”
In an overview in March, the Pennsylvania Farm Bureau said it “appreciates the (Trump) Administration’s trade mitigation package, which will help some of our farmers most impacted by the tariffs; however, farmers need fair and open markets if we are going to see long-term recovery from the depressed farm economy and the ongoing trade war.”
In Harrisburg, tariff talk prompted concerned companies to call the Office of International Business Development in Pennsylvania’s Department of Community and Economic Development.
“The Pennsylvania Department of Agriculture has looked at products and trends to determine the extent to which Pennsylvania agribusinesses would be affected,” DCED Communications Director Casey Smith said. “While we do not have county-level data that tells the story of how businesses and products are being hurt by tariffs, we know that Pennsylvania businesses — from makers of farm products to manufactured goods — are facing major setbacks because of the tariffs.”
However, Schmidt said, “from what I’ve heard, weather and growing conditions are currently an immediate bigger issue. Many couldn’t plant their intended acres of soybeans and corn because of flooding.”
According to measurements taken through Tuesday at the Indiana County Jimmy Stewart Airport, total rainfall for the year to date, 36.93 inches, is ahead of the year-to-date total through Sept. 3, 2018, 32.36 inches.
For all of 2018, a record-breaking 69.21 inches of rain fell in Indiana County.
“A wet spring has postponed some of the crop getting in on a timely manner,” Rising said. “There have been smaller (numbers of) bushels per acre.”
In addition, blight and mold are issues.
“Having too much water is as bad as not having enough,” the Indiana County PFB president said.
In turn, it is one more piece of the puzzle for farmers across the region and the commonwealth.
“China has had an African swine fever outbreak,” Fabin said. “China is also the largest hog producer in the world.”
He said the outbreak has claimed “maybe 30 percent of their hog population.” Recently, analysts told NPR that China’s pork production could be cut in half, or roughly by 300 million to 350 million pigs, by the end of this year.
“That third (of their hog population) almost equates to the (entire) hog industry in the United States,” Kimmel said.
Christine McCracken, a senior analyst at a research affiliate of the global financial firm Rabobank, told the public radio network that Chinese farmers have had a hard time repopulating herds, because of the need to decontaminate facilities used to raise the animals.
Schmidt said tariffs and threats of tariffs, like the recent situation with Mexico, “which is the largest export market for U.S. dairy products,” adds to the stress.
“When it comes to dairy, it is well known that the sector is under stress because of oversupply,” Schmidt said.
Between 2012 and a farm census in 2017, the number of dairy farms with milk sales dropped by six in Indiana County, 13 in Westmoreland County and 14 in Armstrong County.
“Dairy farms in Pennsylvania are small on average, which makes it harder for them to ride out price fluctuations,” Schmidt said. “Over 70 percent of dairy operations in Pennsylvania have less than 200 dairy cows.”
According to charts offered by the College of Agriculture, Food and Natural Resources at the University of Missouri, milk production in Pennsylvania for the first six months of this year is down 6.6 percent from the same period a year ago.
In June, Mexico became the first nation to ratify the U.S.-Mexico-Canada Agreement, which would replace the 1993 North American Free Trade Agreement. In late May, Canadian Prime Minister Justin Trudeau introduced USMCA for consideration in his nation’s Parliament.
On Aug. 22, he and U.S. Secretary of State Mike Pompeo reaffirmed the strength of their nations’ partnership, saying it would be further enhanced by ratification of that agreement. According to news reports on both sides of the border, Canada’s approval process for that agreement is aligned with Washington’s.
Thompson said Congress has to pass USMCA.
“We know that USMCA will open new markets to American agriculture, especially dairy,” the Centre County Republican said, “and I am hopeful an agreement with China will follow shortly thereafter.”
There is help available for dealing with weather-related problems and tariffs. The farmers themselves contribute to their long-term security.
“The soybean industry has a check-off fund,” Fabin said. “For every bushel, we pay half a percent of what we make into a check-off fund that helps promote the U.S. soybean industry both at home and in foreign markets.”
Meanwhile, last year’s extended rainfall qualified Indiana and most other Pennsylvania counties for disaster relief assistance from the United States Department of Agriculture. It was a Secretarial disaster declaration made in March that can include emergency loans from the federal Farm Service Agency and can take applications into the fall.
Indiana is among 33 primary counties, a list also including Cambria, Clearfield, Jefferson and Westmoreland counties. Armstrong is among 31 contiguous counties also eligible for such aid.
That’s in addition to a $16 billion Market Facilitation Program package offered by USDA to support American agricultural producers while the administration continues to work on what it terms free, fair, and reciprocal trade deals.
Farmers can apply until Dec. 6 for direct payments to be made in up to three waves. The first payment will be comprised of the higher of either 50 percent of a producer’s calculated payment or $15 per acre. MFP payments will be made in up to three portions, with the second and third payments evaluated as market conditions and trade opportunities dictate. If conditions warrant, the second payment will be made in November, and the third in early January.
Dairy producers who were in business as of June 1 will receive a per hundredweight payment on production history, and hog producers will receive a payment based on the number of live hogs owned on a day selected by the producer between April 1 and May 15.
Locally, Indiana County farmers could receive $38 per acre, Armstrong County $31, Cambria County $35, Clearfield County $23, Westmoreland County $32 and Jefferson County $30 per acre.
Acreage of non-specialty crops and cover crops must have been planted by Aug. 1 to be considered eligible for MFP payments.
More details are available at www.farmers.gov/mfp or the Indiana County office of the Farm Service Agency, 1432 Route 286 East, White Township. One can call (724) 427-3333.