FACE OF AN ECONOMY: U.S. farmers are facing a tough time and confronting a mental health crisis and suicide

A Journal of People report

The U.S. farmers are passing a tough time.

A CNN report said:

“President Donald Trump’s trade war made last year tough for American soybean farmers, but 2019 could be the year they really start feeling the pain — despite Beijing’s pledge to resume buying from the United States.”

The report (“Soybean farmers are still paying for Trump’s trade war”, by Katie Lobosco) said:

“The amount of soybeans sitting in storage in December hit a record high of 3.7 billion bushels, according to new data from the US Department of Agriculture. That’s equivalent to about 80% of the total US harvest last year.

“Even if China follows through on the additional purchases officials have pledged in trade negotiations, there could still be 900 million bushels for soybeans in storage at the end of this season — more than the entire crop grown in Iowa, one of the biggest producers.”

The Washington, March 20, 2019 datelined report said:

“Farmers have been patient as tariffs have hurt their export markets. The Trump administration made $12 billion in aid available to farmers hurt by tariffs last year, which softened the blow. Plus, some demand for US soybeans shifted to other countries.

“‘So far, farmers don’t feel the pinch directly. But if this lingers on, and we still have billions of bushels in extra supply, this could become more of a 2019 story,’ said Grant Kimberley, a soybean and corn farmer and director of market development at the Iowa Soybean Association.

“But China was previously the biggest export market for American soybean growers.”

The report said:

“With negotiations are ongoing, Beijing pledged — first in December and most recently in February — to place big orders for American soybeans. But even if they follow through, the new orders would account for only about two-thirds of what they bought in 2017, Agriculture Secretary Sonny Perdue said this week in an interview with Bloomberg.”

It mentioned:

“Beijing imposed tariffs in retaliation to Trump’s duties last year — and then stopped buying soybeans altogether. Last summer, the price for American beans plummeted.

“‘We need to see either a promise to buy as much as they have purchased in the past or an increase,’ Kimberly said. ‘If we don’t, we’re going to be behind the eight-ball for several years before we’ll be able to catch up.’”

Citing long-term forecasts from the U.S. Department of Agriculture the report said, the American soybean export market would not recover to last year’s levels until 2024. But farmers like Austin Rinker in Illinois are planning to plant the same amount of soybeans this spring as they did last year.

The report cited Rincker: “Last year was a good year. We shipped everything off the farm.”

The CNN report cited Kimberly:

“Most Midwest farmers don’t have a better option. They mostly sell both corn and soybeans, and the corn market isn’t very strong either.”

It cited other factors at play as it said:

“Chinese demand for soybeans overall is expected to slow. Their farmers are using less protein in their animal feed — which is a primary use for soybeans. Plus, African swine fever hurt their hog industry last year, so there are fewer hogs to feed.

“The fate of the US soybean market going forward depends as much on the weather as anything else, said Bryce Knorr, senior grain market analyst at Farm Futures Magazine. More wet weather will make it harder to plant corn. The severe flooding in Nebraska, for example, could delay farmers there from readying their fields for spring planting of both corn and soybeans.

“Soybeans don’t spoil quickly. They can be kept in storage for about a year, but the beans in storage might get dumped once the new harvest comes in this year, Knorr said.

“Meanwhile, Rinker is keeping his eye on the trade war — even if he’s not making any changes to his planting decisions this year.

“‘Farmers, without a doubt, have a lot of risk on the table. It’s been a lot of wait and see for us, but they’ll have to come to an agreement eventually,’ he said. ‘China was our No. 1 market.’”

Mental health crisis

A Bloomberg report said:

“The worst agricultural downturn since the 1980s is taking its toll on the emotional well-being of American farmers.

“In Kentucky, Montana and Florida, operators at Farm Aid’s hotline have seen a doubling of contacts for everything from financial counseling to crisis assistance. In Wisconsin, Dale Meyer has started holding monthly forums in the basement of his Loganville church following the suicide of a fellow parishioner, a farmer who’d fallen on hard times. In Minnesota, rural counselor Ted Matthews says he’s getting more and more calls.

“‘Can you imagine doing your job and having your boss say “well you know things are bad this year, so not only are we not going to pay you, but you owe us”,’ Matthews said by telephone. ‘That’s what’s happened with farmers.’”

The “American Farmers Confront a Mental Health Crisis” headlined report said:

“Glutted grain markets have sparked a years-long price slump made worse by a trade war with top buyer China. As their revenues decline, farmers have piled on record debt — to the tune of $427 billion. The industry’s debt-to-income ratio is the highest since the mid 1980s, when Willie Nelson, Neil Young and John Mellencamp organized the first Farm Aid concert.

“So dire are conditions in farm country that Senator Joni Ernst, an Iowa Republican, and Senator Tammy Baldwin, a Wisconsin Democrat, pushed for mental-health provisions to be included in the 2018 Farm Bill. The legislation allocated $50 million over five years to address the shortfall of such services in rural areas.

“Ernst said she spoke with a woman whose farmer husband died by suicide. While there’s been progress on a trade resolution, the ruckus ‘has been very, very hard on our farmers,’ she said in a telephone interview. ‘We’ve had such a depressed farm economy.’”

The report by Mario Parker said:

“Few agricultural states have been hit harder than Baldwin’s Wisconsin, whose state license plates proclaim it as ‘America’s Dairyland.’ Wisconsin lost almost 1,200 dairy farms between 2016 and 2018, government data show.

“Smaller operators have been the most affected, she said by telephone. The mental-health provisions in the farm bill aren’t for a ‘free trip to the psychiatrist,’ but rather about ‘community looking out for each other.’”

The report said:

“There was a similar legislative effort in 2008 during the financial crisis, but the program was never funded because prices recovered, said Jennifer Fahy, communications director for Farm Aid, which advocated for the measures.”

It said:

“Two-thirds of the calls to Farm Aid’s hotline originated from growers who have been farming for a decade or more. They were evenly distributed among fruit and vegetable producers, livestock, grain and oilseed and dairy, the data show.

“In 2018, the number of calls rose 109 percent to 1,034, increasing in the last five months of the year. In November, crisis assistance accounted for 78 percent of contacts to the hotline.”

The Bloomberg report cited Allen Featherstone, an agricultural economist at Kansas State University in Manhattan: “The peak of the crisis was in 1986. It is the worst since then by far.”

The report said:

“Mike Rosmann, another of the few mental health counselors in rural America, echoed the sentiments. A partially retired fourth-generation farmer, Rosmann rents out his Iowa property and maintains land under the conservation reserve program.

“During the 1980s’ farm crisis, the hotlines, counseling and other services that he participated in became the template for the provisions in the farm bill that Baldwin and Ernst advocated for, he said.

“‘The retaliatory tariffs by China have hurt soybean exports,’ Rosmann said. ‘They’ve hurt our relations with other countries as well to a lesser extent, partly just because of the skepticism that surrounds the reliability of what the U.S. is doing.’

“Still, farmers support Trump, in part due to his public support for corn-based ethanol, Rosmann said. Last week, the Environmental Protection Agency advanced a plan meant to expand the U.S. ethanol market, the first step in fulfilling a promise Trump made in Iowa last fall. About $8 billion in farmer aid has also taken some of the sting out of the trade war.”

It cited Scott Marlow, senior policy specialist at the Rural Advancement Foundation International-USA in Pittsboro, North Carolina: Farmers have accrued so much debt because by nature they are optimistic.

It said:

“Their fierce independence and deep connection with the land can become an economic disadvantage, Marlow said. ‘They can be driven far further than most of us would be before they would call it quits, to the point of getting off-farm jobs to be able to continue farming, subsidizing the farming operation with off-farm income, driving themselves extremely hard.’”

The report said:

“Sue Judd in Wisconsin set up a suicide prevention group for farmers and those in the rural community after her brother, a hobby farmer, killed himself, she said. Her group’s aim is to convince farmers that it’s all right to seek help and that they’re not alone.

“Meyer, 71, who retired from law enforcement, was on the St. Peter’s Lutheran Church dart team with the parishioner who died by suicide. He says another parishioner who’s a farmer confided to him that he also struggled with stress. Meyer says that his aim with the groups is to “give them some hope if we can.” In the last meeting, 59 people showed up to share food, stories and hear financial advice and how to deal with stress compared with 45 in January.”

It added:

“Farmers’ spirits may lift if U.S. negotiators can broker a favorable deal with China soon. For now though, they’re having to cope with soybean prices of about $9 a bushel, almost half of what they were getting in the heyday of 2012. Chicago corn futures have followed a similar path to be trading at about $3.70 from a peak of $8.49 in 2012.

“‘If the corn price went up $3 a bushel and beans went up $5 my phone would ring a fourth as much as it is now,’ Matthews said during a road trip. ‘Prices are really low and they’re waiting for what are they are going to do. Are they going to lift the tariffs? And so all of those things they’re constantly looking at.’

In mid-February, 2019 the U.S. Department of Agriculture predicted soybean exports would stay below their pre-trade war levels until the 2026-2027 season.

Earlier a report said sales of the oilseed in early January had the worst week ever.

The Federal Reserve Bank of Kansas City warned that farm incomes would likely have a weak start in 2019 and that lenders were tightening credit.

Soaring U.S. meat production and overflowing dairies kept prices low for a long time.

Then came Trump’s trade war.

China slapped tariffs on a host of U.S. agricultural goods.

Ethanol industry may have burned through about $1 billion in cash to weather the tough 2018.

The U.S. farmers are also facing problems in other markets also.

Japan is the top market for American beef, with the U.S. enjoying a 48 percent market share. While a previous agreement already gave Australian beef an advantage, which will widen even further.

American pork exporters will also see more competition, especially from the EU. The U.S. was the top supplier of pork to Japan in 2018. But with the new trade agreements implemented and in the absence of a U.S. deal by April 1, American export losses would amount to more than $600 million by 2023 and $1.06 billion by 2028, the U.S. Meat Export Federation estimates.

This is a face of capitalism in agriculture tied with imperialist interest.

On capitalism and agriculture, Fred Magdoff writes:

“The main purpose of almost all farm production in the United States is to sell raw products at the highest possible profit. There are farmers producing for niche markets and/or ‘adding value’ by processing at the farm (making such items as cheeses and jams) and selling directly to the public. However, the overwhelming quantity of food produced is by farmers selling undifferentiated commodities into a large regional or national market. This goal to maximize profit margins (selling price minus cost of production) governs:

  • What crops are planted in a given year and over time (type of rotation).
  • Which farm animals are raised, if any, where they are raised, and how they are treated.
  • The inputs used such as fertilizers, pesticides, machinery, and needed fuels.
  • The scale of production and mechanization.
  • The extent of hired farm labor and treatment of laborers.
  • When products are sold and use of futures contracts.
  • Whether direct production contracts with processors are entered into. (Monthly Review, “A Rational Agriculture Is Incompatible with Capitalism”,  March 1, 2015)

Michael Perelman writes:

“Although farmers make up the majority of the world’s population, radical economists devote relatively little attention to agriculture. When the subject of agriculture does arise, it usually concerns the conditions of peasants in less developed economies. Perhaps radicals have bought in to the idea that farming represents one of the great success stories of modem capitalism. The [U.S.] Department of Agriculture used to bandy about statistics that one American farmer feeds 40 or more people, while a farmer elsewhere feeds only a few. Perhaps agriculture seems less interesting, since fewer and fewer people in advanced capitalist society have any connection with the farm. In part, this distancing from agriculture reflects the intensification of the social division of labor. Where farmers in an earlier age produced most of their own inputs, today they are dependent on the industrial system for chemicals, fuel, and machinery. As a result, average annual farm employment dropped from 9.9 million in 1950 to 2.9 million in 1997. Where did these jobs go? Some went to farm workers who produced imported food. Some to other jobs that were transferred off the farm. In effect, modern capitalism has moved farmers from the fields to fertilizer and farm equipment factories. Despite access to every conceivable high-tech input, the performance of agriculture in the United States is not particularly impressive in terms of yield, especially for fruits and vegetables. Even for grain, yields in the United States are not especially striking. (“The cost of capitalist agriculture: A challenge for radical political economy”, Review of Radical Political Economics, volume 32, issue 2, June 2000)

These facts should be considered while examining capitalist agriculture, an industry.

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