Zanesville area farmers hope to see larger returns

Post image for Zanesville area farmers hope to see larger returns

ZANESVILLE — After months of financial haggling in Congress and the loss of the United States’ AAA credit rating, many Americans are settling in for what could be a shaky financial future.

But U.S. farmers are prepping their fields for a profitable year.

The U.S. Department of Agriculture forecasts a 19.8 percent jump in net farm income in 2011. That projection puts U.S. farms at making $94.7 billion for the year.

For Matt Bell, a sixth-generation Zanesville farmer, life on the farm is good.

The 38-year-old has been through ups and downs. But his roughly 1,600 acres aren’t wilting from heat like some in Texas or sitting under rainwater like some in Iowa or Missouri. And crop prices are hitting record highs, he said.

Although they aren’t a certainty, USDA forecasts usually are pretty accurate, said Joe Cornely, a spokesman for the Ohio Farm Bureau Federation. The projections should hold just as true for Ohio as for farmers around the country.
High demand

Cornely said one main factor is behind the USDA projections: higher demand for food.

Some countries are experiencing shortages, he said, so they are importing more U.S. grain; the growing biofuels industry also is using more grain; and the world’s population is booming.

But the biggest push behind the demand is higher incomes in developing countries, Cornely said.

“The first thing that happens when you get more money is you improve your diet,” he said. “You buy more food or better food.

“So, you’ve got more people with more money chasing a smaller supply of food.”

According to the USDA, the demand for agriculture will grow by 70 to 100 percent by 2050, and Kari Burkley — director of the farm bureau for Muskingum, Perry, Morgan and Washington counties — doesn’t think the U.S. has enough farmers to meet that demand.

The average age for farmers is senior-citizen level, she said, and the risks that farming entails make it difficult to find young people willing to go into the trade.

“We love to see young people go into farming,” she said. But “there’s always a risk with farming. It’s something you have to be passionate about if you want to go into it because a lot of times you aren’t making a lot of money … it’s a huge gamble.”

For some, the cost of starting a farm is prohibitive, Cornely said. Unless they join up with a family farm, a lot of young people don’t have startup capital to buy combines, tractors and land and build barns and silos, he said.

One solution is that some younger people are going into niche farming, Cornely said, starting small vegetable farms rather than full-blown grain or livestock farms.

“More people are getting into agriculture on a smaller scale and finding ways to get into the business without having to borrow millions of dollars,” he said.
Corn versus cattle

The projections won’t pan out for every single farmer, Cornely said.

“When you’re looking at an average, some people are doing well and some people are doing less well,” he said. “It’s going to be different depending on what the major crop or livestock is.”

In general, Cornely said, grain growers — especially corn, soybeans and wheat — will do better than their livestock counterparts. The reason, he said, is grain farmers are selling their crops at high prices right now, and livestock farmers are paying those high prices to feed their animals.

Bell and his farm have somewhat escaped high feed costs, he said, because he grows most of his own hog feed.
Higher costs

Another damper on the expected 19.8 percent increase in net farm income is the USDA’s projection of higher expenses for farmers. In 2011, the USDA expects farm expenses to increase by $20.2 billion, or 7 percent. That puts expenses higher than $300 billion for the first time.

In 2010, the USDA predicted only a 2.2 percent increase in expenses.

“Farm prices are higher, but the cost of farming is also higher, and that’s largely due to the cost of fuel and energy,” Cornely said. “Virtually everything we handle on the farm, we’re either warming it up or cooling it down or drying it out.

“A lot of farmers will tell you that their cost of production has doubled in the past few years.”

Farmers also can expect less help from the government. In 2011, the USDA predicts the government will shell out $10.6 billion to farmers, a 12.7 percent decrease from 2010.

James McDonald runs McDonald’s Greenhouse on Adamsville Road in Zanesville. He also is the president of the Muskingum County Farm Bureau.

For most Muskingum County farmers, it should be at least an average year, he said. The mix of high selling prices and high costs puts farmers in the medium range, he said.

As a farmer, McDonald has his hand in a few different areas. He has 25,000-square-feet of greenhouse space, 30 acres of corn, 17 acres of pumpkins, 25 beef cattle and a five-acre corn maze.

The farm, originally his wife’s grandfather’s, has been in the family for about 100 years, he said.

With so many unknowns, any farmer who says he isn’t a gambler is a liar, McDonald said. But this year, the gamble should pay off — at least a little.

“We’re not getting rich by any means,” he said, “But we’re not losing our tails either.”
The future

Cornely has been working with the farm bureau for 30 years, he said, and ups and downs are a given in the industry.

Farming is reaching some of the highest peaks he’s ever seen, he said, but eventually, it will fall into another valley.

“I’m not an economist. Everything that I read says that we’re in a period where farming should be profitable,” he said. “But you never know. There are so many things that can affect farm profitability other than just supply, demands and cost.”

Corn can be selling for $8 per bushel, Cornely said, but if a farmer plants his crop late or loses crops to drought or flooding, it doesn’t matter.

“Eight dollar corn doesn’t do you any good if you don’t have any corn to sell,” he said. “So many of the factors that impact a farmer’s bottom line are out of their control.”

For Bell, today’s farm looks nothing like the 230-acre farm his great-great-great-great grandparents started in the 1850s, he said.

The Bells use GPS devices to make yield maps, light-bar guidance and an auto-steering system to eliminate overlap with chemicals or seed, their most drought-prone fields have an irrigation system and their feed mill is computerized, just to name a few adaptations, he said.

“I’m a gadget guy,” Bell said. “We haven’t been, like, the first adopters (of new technology), but we’ve been early adopters.

“It’s amazing, the technology that we use now compared to what we used 10 years ago, probably even five years ago.”

The farm also has become more specialized, Bell said. The Bells only raise hogs now — around 980 of them each year — and most of their 1,600 acres are filled with corn.

While Bell is excited for what looks like a good year, memories from a few not-so-good years are stuck in the back of his mind.

The year 1998 was no fun because of low hog prices, he said, and the H1N1 flu virus scare made 2009 a nightmare.

About 80 percent of the farm’s income comes from livestock, he said.

“If you’re still in this business, you gotta love it, because some days just aren’t very good,” Bell said. But “we’re still here. We are still able to operate.”

Bell wouldn’t say his farm comes out on top financially every year, but overall, it’s doing all right. And he likes where it’s headed, too.

He runs the farm with his wife, Melissa, and his parents, Irv and Jean. Right now, his parents own the majority, he said, but he assumes one day he’ll take over that spot.

He also hopes one day his kids — a 4-year-old girl and twin 8-year-olds, one boy and one girl — will take over for him.

“I think agriculture has a very bright future — if we can keep our costs in line, if we keep our livestock healthy, if we keep our crops healthy,” he said. “All these things will have a great effect on (us), but I kind of like where we are right now.

“It’s a way of life, but it also is a business,” Bell said. “A business can’t run negative for very long.”

hsparling@zanesvilletimesrecorder.com; (740) 450-6758

source:   zanesvilletimesrecorder.com

Previous post:

Next post: