Iowa Farm Bankruptcies Continue to Rise Despite Aid

Farmer Joel Kurtenbach stands Dec. 31 on the land of his former dairy farm in Wyoming, Iowa. #x201c;For the first time i
Farmer Joel Kurtenbach stands Dec. 31 on the land of his former dairy farm in Wyoming, Iowa. “For the first time in my life, I don’t know what I’m going to do,” Kurtenbach said. (Andy Abeyta/The Gazette)

WYOMING, Iowa — For 25 years, Joel Kurtenbach managed a successful Jones County dairy farm and was featured in trade publications for progressive business decisions, such as buying a system in 1999 that could milk 120 cows in 90 minutes.

But milk prices fell in 2017 and 2018 and his contracts dried up.

So he pivoted, selling his 500 dairy cows to a California family and converting his barns to feed cattle for beef.

We raise them to 600 pounds and they go to feedlots in Nebraska and Colorado,” said Kurtenbach, 59, in early November. “We need one more investor worth $600,000 to keep the farm.”

But on Dec. 15, Kurtenbach watched silently as his nearly 700-acre farm near Wyoming was sold in bankruptcy court.

There were 27 farm bankruptcies in Iowa in 2019 — more than double the 13 bankruptcies in 2018, the American Farm Bureau Federation reported. This was despite the $1.58 billion the federal government paid Iowa farmers in Market Facilitation Program payments to ease losses because of the trade dispute with China.

Later this month, we’ll know how many Iowa farms went bankrupt in 2020, but Iowa State University economics professor and crop markets specialist Chad Hart said to expect another increase.

“The government has provided a lot of short-term funding to help farmers get through the year,” Hart said, referring to market facilitation and coronavirus food assistance programs, which funneled two rounds of aid to farmers in 2020.

But for farmers living close to the edge, “there are some long-run problems that don’t necessarily get fixed through a market facilitation payment,” Hart said. “They are needing some additional market recovery to save themselves.”

Overall, 2020 gave some gut punches to farmers — particularly animal producers.

Several Iowa meat processing facilities halted operations in April after COVID-19 outbreaks among employees, NPR reported. It hurt farmers who had cattle ready to sell at that time, Hart said.

“You only get a couple of times a year to get a big sale,” he said. “It makes the difference between the farm or ranch going on or the farm or ranch going under.”

The COVID-19 pandemic slowed growth in global meat imports outside of China, the U.S. Department of Agriculture reported. Although the USDA expects that to rebound slightly in 2021, it was hard for producers without cash reserves.

As if that wasn’t enough, Iowa faced a drought and the Aug. 10 derecho that left 550,000 acres of Iowa corn unfit to harvest, the Associated Press reported.

Bad timing

Kurtenbach knows he’s a victim of bad timing. He moved from dairy to beef at the worst possible moment and although he had contracts to sell cattle, it wasn’t enough to avoid bankruptcy. He filed in November 2018, hoping he could free himself from debt and emerge with enough money to continue farming.

“Everyone said I could start over,” he said. “If I had known then what I know now, I never would have filed.”

[…]

Via https://www.thegazette.com/subject/news/business/farm-bankruptcies-iowa-2020-2019-market-facilitation-program-trade-war-china-20210104

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.