|
FARGO, N.D. (AP) -- Craig Halfmann is doubly
aware of a trend in farm finances, thanks to his work as both sugar
beet grower and equipment manufacturer: Poor crop prices and income
are causing growers to hold off buying new machinery and make do with
what they have.
" I think people are just stretching, "
said Halfmann, who farms near Stephen, Minn., in the northern Red
River Valley.
Halfmann is stretching himself, keeping his
10-year-old, four-wheel-drive tractor in the field. At the same time,
he' s feeling the effect of his neighbors' economic belt tightening.
" It' s about time to be thinking of
something new, but I guess we' re just dragging our feet, " he
said.
Halfmann isn' t alone, according to a report by
the University of Minnesota Extension Service. More than three out of
four Red River Valley farmers surveyed said they postponed buying new
equipment as a way to deal with volatile farm economics.
Others said they bought or shared equipment with
another farmer, while about three out of 10 said they leased equipment
rather than buying outright.
Economists Glenn Pederson and William Lazarus
sent surveys to 400 crop farmers in northwestern Minnesota and
northeastern North Dakota and reviewed farm financial records from
1994 to 1998.
More than four out of 10 farmers surveyed said
they reduced family living expenses to handle economic and production
difficulties. And four out of 10 said they hired custom operators to
cut costs, or invested in an off-farm venture to boost income.
More than a fourth of growers surveyed took a
second job, the report says.
While he finds some financial stability from
manufacturing row-crop equipment, the extra work brings extra stress,
Halfmann said.
" I manage a farm and I manage a small
business, " he said. " It gets hectic at times."
Halfmann says many farmers look for second jobs
as much for the benefits as the extra income.
While the report found farmers were investing in
value-added ventures off the farm, those investments are not without
risks of their own, said Mark Weber, executive director of the Red
River Valley Sugarbeet Growers Association.
" Simply to invest in a grower-owned co-op
is no guarantee, by any means, " Weber said.
He points to the Wahpeton-area ProGold
corn-processing plant as an example. The plant is owned by three
co-ops: American Crystal Sugar Co. of Moorhead, Minn., Golden Growers
Cooperative of Fargo, and Minn-Dak Farmers Cooperative of Wahpeton.
The plant opened in 1996, just as market prices
for its high-fructose corn syrup dropped sharply. A 10-year lease
signed with Cargill the next year brought stability to the operation
and the plant' s co-op owners.
But stability is relative. The plant was shut
down for about six weeks earlier this year, thanks to sluggish demand
for corn sweetener and high natural gas prices, and Cargill officials
have warned they cannot rule out production slowdowns later in the
year.
And large cooperatives like American Crystal
Sugar still have to sell their commodities on the market, Weber said.
With prices for refined sugar near a 20-year low,
it' s difficult for even the best-managed cooperative to return huge
dividends to growers, he said.
" When there' s low prices, no matter how
good of a marketer you are ... that' s pretty tough to go up against,
" he said. |