Minnesota still a great place to raise livestock
As a lifelong farmer, I know risk is always part of the job. However, the last few months have presented our livestock producers with a staggering set of risk-related developments.
Some have been brewing for a long time, and others have come out of the blue. The bottom line is that these risk factors have formed one of the most challenging operating environments I can recall -- especially for our dairy and pork producers.
A variety of factors combined to create this economic turmoil. The global recession weakened export demand and tightened lending policies. This spring's H1N1 influenza outbreak provided an excuse for protectionist-minded countries to close their doors to U.S. meat and poultry products.
At the same time, the outbreak has dramatically affected pork consumption in important export markets. Fuel prices are rising again as we move into summer. Hog production and market demand trends are unfavorable for producers, and the result has been weakened prices. And then there is the influence of market speculators looking to make a quick buck.
One of our primary goals at the Minnesota Department of Agriculture (MDA) has been to boost the competitive strength of our state's livestock producers. We've worked hard in recent years to make Minnesota a place where skilled and responsible producers can succeed.
And those efforts have started to pay off, as demonstrated by the recent study that showed our dairy sector outperformed the national average in a number of business measurements.
That's why it is so frustrating to see that progress slowed by factors largely outside our borders.
Ultimately I believe Minnesota is a great place to raise livestock. Our many advantages, including strong infrastructure and lower feed costs, will see us through to better days. But in the meantime, there are some very good farmers in very tough spots.
Obviously MDA is not in a position to swiftly change the import policies of Russia or resolve concerns about the volatile influence of speculators in commodity markets. But we can explain to national policy makers and to our non-farm neighbors what is happening out there, and what sorts of solutions might be pursued at the national or even international level. We can also continue our efforts to identify and develop export market opportunities in promising areas such as Latin America and East Asia.
Fortunately, there are many resources available in Minnesota to help producers and farm families. The Minnesota Farm Advocate Program offers no-cost assistance for producers facing financial crises. Minnesota farmers also can benefit from the Farm Business Management Program, which seeks to help farmers meet business and personal goals.
Finally, it's a good idea for producers to be in contact with their lenders, and to consult with third-party experts such as tax attorneys when appropriate. While these discussions can be difficult at times, it is best to identify and address problems on the front end rather than cope with their impacts after it is too late to make changes.
(Gene Hugoson is the commissioner of the Minnesota Department of Agriculture.)