Not even depressed commodity prices, stalled trade talks, labor constraints and climate change can stanch farmers’ optimism.
Despite all of the inherent uncertainties in the business, many ag industry professionals see opportunities with new technologies, a diverse crop and the sector’s ability to remain flexible and adjust to the market.
That’s according to West Michigan agriculture industry leaders MiBiz gathered for a recent roundtable discussion. Participating in the discussion along with this reporter and Editor Joe Boomgaard were:
- Bill Bobier, co-owner of Hesperia-based Earthscape Farms LLC, a former policy analyst with the Michigan Department of Agriculture and Rural Development and former four-term state representative
- Andy Hagenow, a Rockford farmer who raises dairy cattle and grows corn and soybeans and serves as the vice president of the Lansing-based Michigan Farm Bureau
- Paul Sachs, director of planning and performance improvement for Ottawa County who serves as executive director of ACRE AgTech, a nonprofit that supports entrepreneurs developing technologies to advance agriculture
- Nick Schweitzer, a fifth-generation fruit grower at Sparta-based Schweitzer Orchards
Here are some highlights from the discussion.
What technological tools are making a difference in your business?
Schweitzer: One of the things we did a year and a half ago is we put up a solar system on the roof of our controlled atmosphere building just to try to mitigate costs in the future. That’s going to be something we keep marching toward. If we can keep that cost down a little bit and get a return and be a little more sustainable in the future, why not do it? We thought it was a good idea. Plus, it runs an irrigation system, which is even better. When it’s sunny out, you can run irrigation then pump water out and save electricity that way. It’s worked out pretty well.
Sachs: There’s an important differentiation in the space we look at with ACRE between technologies. You get your ‘hands-dirty’ technologies that are more pragmatic and they’re addressing some real challenges that affect your inputs. There’s so much attention on agtech as a whole. At the same time, people talk about poor adoption rates. … The way we’re looking at it from a pragmatic standpoint, we want to build this up for Michigan. Not every technology is going to work and not every farmer is going to adopt the technology.
Where can agribusinesses turn for help working through issues around technology?
Sachs: I think there are multiple players that need to come together … but we provide those business support services to organizations. (We ask) what are the challenges of the commodity groups and seek out what those solutions may be and help them. There are technologies being developed just in Michigan with our entrepreneurs, and folks might not even think it’s agriculture-related but it helps problems. It’s creating those connections. We know there are investors in Michigan, too, that we are starting to align stronger with to have more deal flow for Michigan technologies and solutions and supporting entrepreneurs.
How is the labor shortage affecting agriculture?
Schweitzer: There are a lot of guys that are switching their wages (and relying on the H2A visa program) just to make sure they can get workers in when they need them and the numbers that they need to be able to get the harvest done. We haven’t switched to that yet. We still get all (people) who come up from down south, but that’s the way a lot of guys are going. It costs a heck of a lot more (and) the regulations for housing and stuff too, they’re a little more stringent. … The big thing is just trying to develop the working systems now for mechanization in the future so we can really cut down on the workers.
Can you use automation or mechanization to get around the shortage?
Schweitzer: It’s a plan. We’re trying to be proactive and plan for it and set up an orchard so it makes it easier, at least. If we can’t go to full robot next, we can go up to a platform of cutting down that tree (to) a point where you can reach through and pick on one side so you don’t have to go up and down every single row, and we can make it a lot quicker. (Technology) increases that efficiency so you need fewer workers overall and can do it a lot quicker and more efficient. It lowers your costs, too.
Hagenow: Yeah, it’s a whole system, but it takes a different style of management. You can’t just have a robotic milker, and all right, I’m going to Florida for six weeks. You have to train the cows … and keep track of all the data that the unit supplies to you about each cow. You really have to be at the barn. Plus, that one unit does 60 or 65 cows and it’s about $200,000 a unit. That’s not including a new barn to put it in. Most barns that are up aren’t really conducive to (this) type of set-up.
Sachs: You always need labor, even with technology. It’s just different steps.
With farm incomes declining and debt rising on a national basis, where does this whole cycle go from here?
Bobier: It’s really hard to get a sense. My advice to people is to plan for flexibility. Do what you can first to have your own resiliency and see where you fit in your community. At least after the last crash, there was a little more emphasis on re-localizing supply, or localizing food. That’s where craft beer is great because people said, ‘How come all our beer comes from St. Louis? Let’s throw a little barley and hops in and see what happens.’ That is an example of that (localism) that should always be part of what we think about.
Could uncertainty related to trade and tariffs put some farmers over the edge?
Schweitzer: The timing could’ve been a little better. It’d be one thing if the farm economy was strong and they wanted to renegotiate with us, but when it’s already in the pits, it’s one more hit on our injured industry.
Sachs: There’s a public perception and education issue. One of the areas we are looking at from a county planning department perspective, in Ottawa (County), is that educational piece right off the bat. (It’s about) elevating the understanding of agriculture locally and how it’s such a dominant industry and the value that it provides, and the workforce and everything to the food processors here in Ottawa County.
Hagenow: It seems like when agriculture does well, a lot of people do well. But when everybody is doing well, agriculture is not. It takes a hit. When the dollar is strong, ag supports are off, and there goes your price. I think the industry as a whole understands that there have been some deep-rooted problems in some of these trade agreements with the other countries. It’s not just agriculture that’s been taking it on the chin. Our economy as a whole was doing strong, and I guess if there’s a time to do it, that’s when you do it. Agriculture is taking the brunt of it, but … I think there’s still optimism out there.
Why be optimistic now?
Hagenow: Well, mostly because farmers are optimists by nature. Things are already bad, so you don’t have much choice. You can be optimistic that things are going to work out, one way or another, or we’re going to have some bigger problems. I’m not talking food shortages, but you think there’s consolidation of the industry now, if (the economy) really hits the tank, (watch out).
Bobier: When the crash came, we were really lucky that ag was doing as well as it was. … It felt to me like when we came out of the Great Recession, ag was doing pretty good. It was the only place you’d see construction going on. From just a resource management perspective, I like to think our wealth comes from the ground and that we proudly helped grow that out. Now, here we are, with (commodity pricing) being what it is and the unknowns and uncertainty of what’s going to happen. I just think maybe there’s the adaptability or the seeking of how can we do this a little better because sometimes you’re just trying to hold your own.
How much is climate change affecting resiliency planning for farming operations?
Bobier: Ag has a really important role to play in the carbon cycle that is almost underrated. We almost got to where we were getting the attention it deserves, and then things changed, and we’re not getting a carbon exchange (and they’re) saying the sequestration stuff is way too complicated. I think that as long as ag keeps in mind that this is the way nature works, it takes carbon, puts it in the ground for a while, puts it in the air, then it takes it right out, that’s an important aspect. Regardless of how fast we think it’s changing or not, we just should be aware of it.
Hagenow: I think there’s management practices that we can do to improve our soil and our local ecology. There’s nothing new under the sun. Our parents had it different on their operations, our grandparents had different weather in their operations. We’re growing different crops, and we’re all growing corn, soybeans, apples, and beef, but they’re not the corn, soybeans, apples, and beef that our grandparents grew.
Schweitzer: In tree fruit in the last few decades, our bloom date has moved up. I can’t say by how much, but the farming period for a lot of fruit has moved up because we’ve had earlier springs. It’s been moving slightly. I think there may be slight effects on that and maybe it’s cyclical, who knows. … We’ve also seen a lot more periods in August, late July, where we have a three- or four-week period where all of a sudden the rain shuts off. That’s a pretty important time for us and our fruit, so that’s why we put in our irrigation.
What should other business executives take away from the impact that ag has on West Michigan?
Sachs: (We need) to really understand the strength of agriculture, what it provides with food to the impact on local economy and jobs, translating all the way up to the processors, and the trucking and logistics, and the technology companies. You look at agriculture, it’s such a hub for all these unique opportunities. More and more, people need to be aware of agriculture as a business, and connect the business community with agriculture in a stronger way.
Hagenow: The farmers are the true environmentalists. We’re working all day long, we eat what we grow, and take pride in the fact that we can produce quality products, whether it’s going on a grain truck and headed to a feed mill, or the apples on the tree going right to the consumer.
Schweitzer: You want to sustain that land too for the next generation and be a good steward.
Hagenow: Profitability is sustainability, and you can’t have one without the other.
Bobier: Diversity is really important. The more diversified an environment, the more stable. We want stability. We want diversity and that applies to all forms, whether it’s class, race, soils, climate, and microclimates. We’ve got that here, and we just need to promote it.
Schweitzer: And protect it, too.