| In previous years, they were everywhere.
Across the region, one didn't have to look far to find,
posted somewhere, a handbill for at least one farmer's
going-out-of-business auction.
But as farmers prepare for the 2001 growing season, has
recent years' large-scale exodus from farming ended?
For the meantime, at least.
That's not to say farmers aren't continuing to opt out and
hold auction sales. But the tide may have stemmed somewhat,
experts say.
One reason for a decline in the number of liquidation
auctions by farmers is that government payments last year gave
many farmers some badly needed breathing room.
Hard-and-fast statistics on farm auction numbers are hard
to come by, said Andrew Swenson, North Dakota State University
farm management specialist.
"One thing, there's fewer farmers left to have
auctions, so the percentage leaving may be the same, just of a
smaller base. Plus, the numbers don't usually tell how many
are coming in compared to the number getting out -- they don't
reflect the turnover, just the number of farms," Swenson
said.
Federal aid
One significant factor in a decline in farm auction numbers
likely is the amount of federal aid provided to farmers in
recent years, particularly last year.
"We've had a very strong infusion of government
aid," Swenson said. "I think that's probably helped
more people stay in business -- if they were in a difficult
balance sheet situation, it probably allowed them to keep
going."
A decline -- or at least a stabilization -- in the number
of farmers going out of business, voluntarily or otherwise,
also could be related to the continuing trend toward farmers
and their families finding outside employment to supplement
on-farm income.
"There are those that depended, at least in the past,
on agriculture to supply a good part of their family's living
that now have a full-time, off-farm job," Swenson said.
In addition, farmers who were most seriously saddled with a
high debt load have, to a large degree, been worked through
the system, said Rod Hogan, a loan program specialist with the
North Dakota Farm Service Agency.
"I think it's pretty much stabilized. It seems that,
when it comes to our accounts that have been delinquent for
two years or more, those people have worked their way through
the system by now -- either voluntarily, by deciding to phase
out of farming, or involuntarily -- by having to go through
the collections process."
Smaller numbers of farm liquidation auctions, however,
don't necessarily mean the present outlook in farm country is
a rosy one.
Ongoing 'pinch'
"The area that's still going to be feeling the pinch
is the (Red River) Valley. There's a lot of people here that
are basically subject to grain prices," Hogan said.
"And I think our potato and beet guys are going to
continue feeling the pinch as well."
With production costs mounting, this crop year could be
only a lull before another serious round of farm liquidations,
said Pennington County extension agent Howard Person.
Person also works with Project Farm Wrap, an organization
that coordinates services aimed at helping farmers leaving the
business to make the transition into other lines of work.
"We're on a temporary reprieve, that's what's
happening -- we're skating on thin ice," Person said.
"Last year, we had unusually high government farm
payments -- crop insurance, double AMTA payments and disaster
payments. Plus, prices were poor, but we had good yields, so
loan deficiency payments were also higher. So, last year, a
lot of people gained some ground, on average. But it's hard to
run the farm on what you think Uncle Sam will do."
Problems still there
But with farm input costs -- namely fuel and fertilizer --
at or near all-time highs this spring, many farmers stand to
lose the ground they managed to gain.
"The fundamental problems are still there -- in some
cases, fuel and fertilizer costs are up 50 percent to 60
percent from last year, and I can't see them going down,"
Person said. "And that's with (commodity) prices at or
below what we were seeing last year."
In previous years, medium-sized operations -- the
traditional "family farm" -- often were among the
hardest hit by weather disasters, crop disease and low
commodity prices because they couldn't withstand successive
years of losses. But that could change as well.
"If the smaller farmer is getting ahead now, it's
because he's working in town, his wife is working in town, and
they don't take their family living off the farm," Person
said. "But if we have another bad go-around, it could be
the bigger guys, too. There's still a lot of people scratching
their heads about what'll happen." |