MFU member Peterson to House Ag subcommittee: ‘There’s just no way to be profitable’
May 9, 2019
Like many family farmers in the United States, Mike Peterson of Northfield, Minn., has worked hard to lower input costs in the face of low farm income. Yet he still has found his farm in a tough financial situation.
Peterson testified on his experience today at a hearing with the House Subcommittee on General Farm Commodities and Risk Management, a section of the House Agriculture Committee. Congresswoman Angie Craig, a Democrat from Minnesota’s Second District, is a member of the subcommittee and represents Peterson’s area in Congress. She invited him to testify.
Peterson, a member of Rice County Farmers Union, raises corn and soybeans with his wife and two sons on 800 acres, as well as finishing about 1,200 hogs per year and running several entrepreneurial enterprises.
“The last five years have been incredibly challenging on my farm and on farms across Minnesota,” Peterson said. “Market consolidation and the increase of monopoly power has caused our input costs to rise dramatically. Overproduction has driven commodity prices low – a situation that is further exacerbated by the impacts of ongoing trade disputes. Our current environment is unsustainable.”
Peterson focused his testimony on how major agribusiness mergers have left farmers with fewer options for seeds and fertilizer, and thus higher input costs. He also told the subcommittee how the Trump administration’s trade wars have lost agricultural markets, costing farmers the ability to get fair prices for their products.
“While I originally supported the goals of securing better trade agreements and holding bad actors accountable, the approach to these trade disputes has caused damage that I’m afraid will take us decades to overcome,” he said. “If policy makers are going to use our export markets as bargaining chips, they are either going to have to help us manage supply or keep funding the farm safety net. I realize that trade negotiations are tough, but American farmers can’t bear the weight right now.”
Having a strong farm safety net in place is incredibly important in these tough times, Peterson said. He’s been enrolled in the Agricultural Risk Coverage (ARC) County program and crop insurance, which have helped with risk management and severe weather damage.
Peterson and his family have worked to reduce input costs by adopting conservation practices such as no-till and cover crops. But breaking even is still a challenge for them.
“Because we have so little cash flow, we are not able to afford the costs of installing practices that will improve our position in the long term,” Peterson said. “We’re faced with a financial situation that is hard to present to a lender.”
Above all, Peterson said, we need to provide fair prices and market opportunities for family farmers if we want them to continue through the next generations.
“Despite all I have done to adjust to tight margins and low prices, there’s just no way to be profitable with the market scenarios facing the American farmer today,” Peterson said.
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Minnesota Farmers Union—Standing for Agriculture, Working for Farmers (www.mfu.org).