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Trumbull Farmers Hang on as Commodity Prices Fall

HARTFORD Township, Ohio — Brian Eucker walks toward the back of the barn where he sells the apples and peaches he grows on his 40-acre orchard in Hartford Township. It’s a pleasant, sunny day in late November, and the last of the fruit was picked just three weeks earlier.

“This farm has been in my family since 1940,” he grumbles. “I don’t know for how much longer, though. It’s just not what it used to be.”

It wasn’t a good year for Eucker, the owner of Hartford Orchards Inc. An unexpected turn in the weather knocked out most of his apple crop this season, leaving him no option other than buy from other orchards and resell them at his store just off state Route 7.

“I think I had an average of five apples per tree – the frost got ’em,” he says. “So, I was forced to buy and resell, and I had a very mediocre year.”

Such is the life of farmers in Trumbull County. One season could be a resounding success – governed by high prices for produce, great returns, and splendid weather for both growing and harvesting. Another could be a bust – marred by lower prices and hampered by either drought or too much rain – a deadly combination that could ruin an entire year’s worth of work.

In a business that wrestles with uncertainty every year, one trend is certain: The number of farms in Trumbull County continues to shrink. It’s more common today to find family farms without a next generation interested in pursuing a life in agriculture. These smaller farms are sold after their owners retire or die, and the land is purchased by larger operations that have a deeper bench of family members willing to take on the extra acreage and expand their holdings.

“I used to raise huge amounts,” Eucker says, “but I can’t sell a fraction of what I used to.” At one point, Eucker says, his orchard spanned 130 acres. Today, it’s dwindled to just less than 40 acres.

Competition with local grocers is much more intense than it was 30 years ago, he says, because most stock apples all year round, putting pressure on local growers such as Eucker. “Corn, wheat and soybeans are fine – they’re worth some money. The specialty crops are tough,” he laments. “A lot of the other orchards are having the same problems.”

Labor is difficult to find, property taxes are more than double what they were five years ago, and younger people show little enthusiasm to move into the industry and take over, he says. With no family successor in place to assume ownership, it’s likely Eucker will have to sell.

Dairy farms are struggling, too, reports Lee Beers, an agent for the Ohio State University Cooperative Extension in Trumbull County. “In the near term, it doesn’t look great [for dairy farmers],” he says. “I know of at least one dairy farm that’s gone out of business.”

Meanwhile, niche markets such as freezer beef – that is, beef sold before its butchered and packaged – are doing well.

Other farms in the region have experienced steady yields, mostly the result of a solid mix of corn, wheat and soybean crops whose prices – while not especially strong now – have the potential to increase.

Perhaps no community better exemplifies a farmer’s life than Gustavus Township, where large and small family farms dominate this section of northern Trumbull County. Gustavus Center is the crossroads where state Route 193 and state Route 87 intersect – living, tangible history of the county’s agricultural heritage.

Lining the west side of Route 193 are quaint houses and township buildings. Some built nearly two centuries ago are so well preserved that you feel as if you’re staring directly into the heart of Andrew Jackson’s America.

The Farmer’s Exchange Store, today a private residence, was built in 1828, near where George Hezlep constructed a magnificent brick house in 1832. Others such as the Gustavus Federated Church came later, in 1856, as did the Fraternal Hall in 1870.

“I came from the hospital at birth to this house,” reflects Al Bradford, a 73-year-old who has made farming his life in Gustavus and still lives on Gardner-Barclay Road. “I’m very fortunate. My mom and dad left me this farm and I’ve made a living.”

Bradford farms 450 acres, 288 of which he owns and another 162 that he leases. His staple crops are soybeans and corn. The soybeans are often transported to the Ohio River, where they are loaded onto barges and sent to markets all over the country – perhaps the world. “I’m not sure where they go after I send them out,” he says. Corn is used either for feed or converted into ethanol, which is a steady market for the farming community.

“I’m just an old family farmer,” Bradford says, acknowledging he doesn’t know what will become of the farm once he retires or dies because there isn’t a third generation to move in. “My dad bought this farm in 1939 and I took it over when I was 33,” he says. “There’s no one to take it over.”

Despite the ups and downs, Bradford says he considers himself a successful farmer. “The challenge is not to bite off more than you can chew,” he counsels. “If you watch yourself, you can make a living.”

But owning and operating a farm – even a small one – isn’t for the faint of heart, Bradford cautions. “It takes a special person to hang on to a farm. You’ve got to really like it.”

It’s difficult to recruit young people who are not family into a life of farming, he observes. And, it’s now more likely that those children of farmers who have left for college will choose another path in life, leaving the farm without a successor. In his case, he’s come to the realization when the time comes he’ll have to sell, probably to a larger farm with a solid succession plan in place.

For some of the larger family farms, succession isn’t much of an issue. Yet each struggles with the same market prices, taxes, insurance premiums and equipment overhead as others. The real key to success in this part of the country is to diversify the operation’s services.

“We’re really an atypical farm,” says Robert Miller of W.I. Miller & Sons Farms in Gustavus. “We’re like any other business. Costs keep going up, only we don’t set the prices we can sell.”

W.I. Miller helps its bottom line through sales of fertilizer and seed. “We’ve done that for more than 30 years, and we’ve been in the seed business since 1947.”

About 90% of the crop consists of soybeans and corn, while the rest is devoted to oats, wheat and barley. Of those crops, barley might hit a growth patch because of the rise in the craft beer industry.

“Generally, the barley is grown out west, but we’d like to get into it a little bit,” he says.

Miller is the third generation to run the farm since his grandfather moved here in 1925. “I’m the oldest, and my son is interested in taking over,” he says. He foresees the possibility for a fifth generation one day assuming the duties of what has grown into a very large operation.

Forty years ago, W.I. Miller farmed roughly 1,200 acres, his grandson says. Today, the farm has expanded to 5,200 acres, mostly through the acquisition of other farms put on the market through estate sales and retirements. “We’ve gotten bigger over the years – a little here, and a little there,” he says. “That’s pretty common today – the small farms are getting smaller and the bigger farms are bigger.”

It’s a trend playing out across Trumbull County and throughout the country. According to the U.S. Department of Agriculture’s last census conducted in 2012, there were 888 active farms in the county, down from 970 five years earlier, or an 8% decrease. While the number of farms decreased, the average farm size remained unchanged at 128 acres in 2012 compared to 2007.

The amount of land farmed stood at 113,896 acres in 2012 versus 125,136 acres farmed in 2007, according to the census.

What increased substantially during the period is farm income across Trumbull County, data show. In 2012, the total market value of products sold from the county’s farms registered $66.4 million versus $41.5 million five years before – a 60% increase. Average farm income in Trumbull County saw an even larger boom in 2012 – 75% – to $74,842 from $42,847 in 2007.

The spike in family farm income was directly tied to the record-high commodity prices of 2011-2012. That year, soybeans sold at more than $17 per bushel versus around $11 five years earlier. Corn, which hovered around $3.25 in 2007, jumped to more than $8 per bushel in 2012.

Since then, prices have fallen significantly.

“We’re in a period of depressed commodity prices,” Miller says.

As of Dec. 7, soybean prices stood at $10.47 a bushel, while wheat – which saw record highs of around $9 a bushel in 2012 – traded at $4.04. Corn prices have retreated to just above $3.50 per bushel from $8 four years ago.

“There were very high commodity prices at that point,” says Mary Smallsreed, president of the Trumbull County Farm Bureau. “They’ve bottomed out.”

While high commodity prices meant good times for family farm income, they also forced the state to reset the Current Agriculture Use Value, or CAUV, a formula that taxes farmland based on its productive worth rather than its real estate market value. Thus, when grain prices skyrocketed, the CAUV increased, Smallsreed says.

The major issue farmers face is that the CAUV is determined by production value of previous years, so the valuation today reflects a period of more than two years ago when the pricing environment was still strong, Smallsreed says. That leaves farmers paying higher taxes while at the same time struggling through a lower-price environment, she says.

As an example, she says, her family in 2009 paid $430 a year on 76 acres of prime, flat farmland they own in Morrow County, Ohio. “Now, it is $3,230 a year. When farm income is decreasing, our property taxes are at a high level.”

There is also a factor that is beyond the control of farmers or anyone else – the weather, Smallsreed says. Sometimes, the difference between a farm receiving the proper mix of rain and sun to one stricken with drought could be a matter of just miles. “One farmer a few miles away could get enough rain, and we won’t,” she says. “That’s how it happens and farmers take on that risk.”

And the very nature of the business is changing in that more farmers rely on more sources of income to keep the family farm afloat. “A lot of them have a full-time job off the farm, and farming is secondary,” Smallsreed says.

Her husband’s family farm in Braceville recently sold its last dairy cow to focus on farming about 200 acres of soybeans, corn and wheat. Meanwhile, she holds a full-time position with the Ohio Department of Agriculture.

The average age of a farmer today is 58, and just 6% of the industry nationwide is composed of growers under the age of 35, Smallsreed says. “Is the next generation going to step up?” she wonders. “I grew up on a dairy farm in Geauga County. And so far, the nephews have selected off-farm jobs. The next generation is choosing to do something else.”

Smallsreed has faith that young people can make the family farm work, but they should understand fully the upfront costs of machinery, land and their personal commitment: “A determined young person who is willing to take the risk, I believe, can still farm.”

Pictured, top:  Brian Eucker says an unexpected turn in weather knocked out most of his orchard’s apple crop this season.

VIDEO:
‘3 Minutes With’ Mary Smallsreed, president, Trumbull County Farm Bureau

Published by The Business Journal, Youngstown, Ohio.