FARGO, N.D. — Unplanted fields, still-unharvested 2019 crops, supply chain concerns, reduced exports, COVID-19 — these are challenging times for Upper Midwest agriculture.
Despite the challenges, there are reasons for optimism, too, according to speakers at a webinar on "The Farm Economy — Stable, Rebounding or Declining?" hosted Tuesday, May 12, by the Chamber of Fargo, Moorhead and West Fargo.
Much of the Fargo metropolitan statistical area — in which corn, soybeans, wheat and sugar beets, among other crops, are grown — is exceptionally wet and planting overall is much less advanced than normal. The Fargo MSA has about 250,000 people; promotional material from the chamber said that "agriculture is known to be the backbone of our economy." Fargo and West Fargo are in North Dakota, with sister city Moorhead, Minn., separated by the Red River of the North.
Panelists were Rep. Collin Peterson, D-Minn.; Steve Connelly, vice president of Midwest Agriculture for RDO; Marc Knisely, president and CEO of Ag Country Farm Credit Services; and Nancy Johnson, executive director of the North Dakota Soybean Growers Association.
Asked what's needed for the area ag economy to rebound, Knisely answered, "It's a return to profitability," adding that ag producers generally are doing a good job of managing their finances.
Relatively good yields and government payments have helped area farmers in recent years, putting them in better position to get through current conditions, he said.
Peterson, chairman of the U.S. House Agriculture Committee, said he's worried about supply chain issues in meat and ethanol and that he thinks more attention should be paid to maintaining and strengthening the supply chain.
Johnson noted that economies of key trading partners such as China, Mexico and Canada have been hurt by the pandemic, which reduces their ability to buy U.S. products.
Then and now
The area farm economy suffered badly in the 1980s, and there's concern in some circles that more economic pain is ahead. But panelists said there are major differences between then and now.
Values of assets such as land are holding up well, and interest rates are much lower now, reducing borrowing costs, panelists said.
Improving technology helps farmers, too, Connelly said. Once, an AM radio in tractors was cutting-edge; today, increasingly sophisticated tech, as well as bigger and better farm equipment, helps farmers be more efficient.
Perhaps the biggest reason for optimism is the skill and flexibility of modern farmers, Knisely said.
"They're very adaptive. I think all businesses are going to likely change as a result of COVID-19," he said. In agriculture, "We've got a very innovative bunch coming up. There's a lot of innovation and commitment."
Even with so much uncertainty, "Farmers are very resilient. They'll figure out a way to work through this. They'll change their (business) models as they need to," Knisely said.