Michigan farmers fear ruin as coronavirus lockdown collapses prices

In this photo from last year, Corner Oak Farm co-owner Julie Juengel turns off a milking machine. After a rough years, the farm near Grand Blanc last year sold its herd to another farm. (Photo courtesy of Tim Jagielo of Tri-County Times)

A dairy farmer all his life, Dan Weil just scraped by over the past few years as the market price of milk tumbled. A wet spring last year cost him half the corn crop on his 1,000-acre farm operation in Goodrich, southeast of Flint.

Now he’s bracing for the next blow, this one triggered by a state lockdown in response to the COVID-19 outbreak.

“We just came through the weather last year and now it’s this,” said Weil, who recently borrowed money to install a $600,000 robotic milking machine to boost production.

“It seems to be one thing after another. It’s pretty scary.”

Demand for retail dairy products initially surged last month, as worried shoppers stocked up on staples including milk and cheese. But that was more than offset by the shutdown of schools and dine-in restaurants in Michigan, as Gov. Gretchen Whitmer issued executive orders in March to enforce social distancing and slow the spread of the coronavirus. 

On April 2, Whitmer closed all K-12 schools for the remainder of the school yea, collapsing a huge wholesale market for milk, cheese and butter.

At the same time, the price of milk is plunging on the futures market while dairy exports dry up, threatening to put some of Michigan’s estimated 1,250 dairy farms out of business.

Genesee County dairy farmer Dan Weil said he’s worried about finances now that Gov. Gretchen Whitmer’s stay-at-home order has collapsed the market for milk. “It seems to be one thing after another. It’s pretty scary.” (Courtesy photo)

Michigan greenhouse plant and flower growers, meanwhile, say a new Whitmer executive order issued Thursday that includes the closing of retail plant and garden centers threatens their livelihood as well.

“It’s just a rough situation for everyone,” said Sharon Toth of the United Dairy Industry of Michigan, an industry advocacy group.

Frustrated dairy farmers in states including Wisconsin, Vermont and New York already have taken to dumping milk, as processors turn away their tankers of milk. Growers from California to Florida, meanwhile, are leaving strawberries, squash and green beans to rot in the fields as their wholesale market dries up. The National Sustainable Agriculture Coalition projects $1.3 billion in U.S. farm losses from March to May.

Joe Diglio, president and CEO of the Michigan Milk Producers Association, said it could be a matter of time before Michigan dairy farmers are forced to do the same. The dairy-owned cooperative and milk processor serves about 750 Michigan dairy farmers.

“Inevitably we will be in a position where some have no alternative but to dump milk,” he said.

About a week ago, the trade group sent a memo to its members warning what could lie ahead: 

“The dairy supply chain is in shambles. While some processors are running at capacity, others are operating below capacity and some have closed altogether due to a lack of orders or an absent workforce. Hundreds of loads of milk are being poured down the drain or into manure lagoons.”

‘I’ve been through bad times’

About 25 miles west of Ann Arbor, Mike Fusilier and his family have an acre’s worth of hanging flower baskets and flats of plants and flowers stuffed into their farm greenhouses. It’s ready for market.

He’s part of an agriculture sector the Michigan Farm Bureau says accounts for $580 million to $900 million in annual retail sales and employs more than 9,000 workers.

Now, Fusilier said he has nowhere to sell those plants under Whitmer’s executive order that extends to the end of April.

“I’ve been through bad times, bad weather, bad markets,” Fusilier told Bridge.

“But never the loss of crops because of a virus and a policy change. This is about as worried as I’ve ever been.”

Greenhouse grower Mike Fusilier said Michigan’s ban on sales of flowering plants during the stay-at-home order has him  “about as worried as I’ve ever been.” (Courtesy photo)

Fusilier figures he has maybe a month or so to sell his plants and make any kind of profit.

“If it continues the way it is, we will put the plants in the manure spreader and spread them in the fields.”

He also wonders why Michigan growers are being put in jeopardy, while Ohio Gov. Mike DeWine’s most recent stay-at-home order allows retail garden centers to remain open.

“I don’t believe that is fair,”  Fusilier said. “It puts us at a real disadvantage, for sure.”

Bridge requested comment from Whitmer’s aides about the decision to close garden centers, but did not hear back on Friday. 

On Thursday, Whitmer said the expanded order is part of a broader effort to reduce crowds at stores and slow the spread of the coronavirus, which has infected more nearly 23,000 residents as of Friday.

A struggle

But even before COVID-19, Michigan dairy farmers were struggling to keep their heads above water.

According to the National Family Farm Coalition, farmers are paid $1.45 on average per gallon of milk. But it costs them about $2 produce that gallon. Prices tumbled nearly 40 percent over the past five years, as a worldwide glut of milk drove down its price.

Milk prices ticked up a bit in 2019, raising hopes 2020 would be a good year. The coronavirus obliterated that prospect, as Diglio of Michigan Milk Producers said the wholesale dairy market “pretty much collapsed on us.”

Michigan had 2,088 dairy farms in December 2012, according to the United Dairy Industry of Michigan. That fell to 1,246 in December. Even so, dairy remains a key agricultural sector in Michigan, as the state ranked fifth in U.S. milk production in 2017.

The decline in dairy farms has been steeper in Wisconsin, which lost nearly 700 dairy farms in 2019. That included 90 in April alone, as farmers pulled the plug that month rather than invest in the seed, fertilizer and other supplies they would need for planting season.

The mass shutdown of restaurants and schools around the country is forcing dairy processors to try an abrupt shift from wholesale food-service markets to retail grocery stores. That means packaging headaches, especially, for plants that process milk into cheese. 

Dairy analysts said it could take millions of dollars to switch a plant from processing cheese for the wholesale food market to those sold by retailers. 

Even a switch from the 10-pound bags sold to restaurants to the 8-ounce bags sold in stores is costly.

And dairy farmers are particularly vulnerable because milk is perishable and can’t be stored or frozen. If there’s too much for the market, it gets dumped.

There’s federal aid on its way to U.S. farmers, though it’s unclear whether it will be enough to offset losses. The $2 trillion coronavirus rescue act dedicates $9.5 billion in assistance to agricultural producers and $14 billion more for farmers who have seen a crash in commodity prices due to the COVID-19 pandemic. 

About 25 miles north of Lansing, dairy farmer Ken Nobis is warily tracking the futures price for milk. The class of milk made into cheese is forecast to fall to about $12 per hundred pounds of milk in May. Nobis farms about 3,000 acres, milking 1,100 cows.

Mid-Michigan dairy farmer Ken Nobis predicted that “some farmers may say to heck with it, I’ve had enough.” (Courtesy photo)

Nobis said no farmer can break even at that price.

“You are losing a lot of money at that point. The check [for milk] won’t be enough to pay for feed,” he said.

Nobis said he is counting on a return to a normal food market this year, with forecasts that cases of COVID-19 will taper off in the coming months.

“We are preparing to move forward. We have to. It’s just that getting through this could be extremely painful.”

Nobis said he has the financial resources – and a good relationship with his lender – that should allow him to weather the storm.

But he said other Michigan farmers may not be so fortunate.

“Dairy farms have burned through so much equity in the last five years. That’s where the banker comes in. If you are already upside down and they’ve been playing ball with you, the banker may reach a point where they see no choice” but to cut off credit, he said.

“Some farmers may say to heck with it, I’ve had enough.”

A couple years ago, Peter and Julie Jeungel wondered how long they could hang on to their dairy operation south of Flint, Corner Oak Farm, where they milked about 180 cows.

“It’s rough. We’re managing, we’re making cuts,” Julie told a reporter then.

She added: “It’s an uphill battle it seems like, but it’s a beautiful way of life. I don’t think I’d want to do anything else,” she said.

Then came the spring rain deluge of 2019. 

“That was the straw that broke the camel’s back,” Julie told Bridge earlier this month.

“We knew we wouldn’t have the feed and we wouldn’t have the money to pay for the feed. And that was it.”

Last summer, Corner Oak Farm sold its cows to another dairy farmer.

“It’s one of the decisions you dread making. But I am very happy to have that in the rearview mirror,” she said.

If they hadn’t made that decision?

“We would be bankrupt,” she said.

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Comments

Churchill
Fri, 04/10/2020 - 6:04pm

Heil Whitmer!
Heil Whitmer!
Heil Whitmer!

Don
Sat, 04/11/2020 - 8:19am

Yep she is a closet republican!!! WHY did she stop the investigation into the poisoning of Flint???

Common Knowledge
Sat, 04/11/2020 - 12:01pm

I think she stopped the investigation because of two reasons- 1) it as a politically motivated investigation designed to pin a crisis that was caused on Democrats on Republicans, and once she got elected there was no need to politicize it any more, and 2) the facts of what happened in Flint have long since been revealed so there is no need for an investigation.

Don, witches aren't real. Stop trying to get the government to engage in witch hunts to go after your political enemies.

George
Sat, 04/11/2020 - 12:27pm

I believe that was Dana Nessel and the reason given was that the previous AG, Bill Schuette's charges were virtually unenforceable. But then, maybe you want an alternative reality.

IDK
Sat, 04/11/2020 - 3:16pm

Who could have known such a thing would happen? How could we have prepared? Obama
Here he is telling congress in 2014, asking for funding:
https://www.cnn.com/videos/politics/2020/04/10/barack-obama-2014-pandemi...
Yet it was so important for Drump and the GOP to undo everything Obama put in place and impede him throughout his presidency. Well, now we have the consequences. Heil, Drump! Heil, broken GOP Socialist Party! Now Whitmer is the scapegoat. So ridiculous! The buck stops at the top with Drump. He blames Obama for everything, but Drump has failed us from day one, lied thousands of lies, prepared for nothing and systematically dismantled our government, replacing competent officials who worked in admins from both parties with incompetent family members, donors, party hacks, projecting unwarranted criticism of critics. Now you fools and everyone else has to live with the consequences!

IM Smart
Sat, 04/11/2020 - 5:19pm

So your point is that "Obama knew".... and what exactly did he do that was so amazing that prepared us for it? And then you say "GOP undid everything Obama put in place"- can you cite a relevant example? Wait, that's not correct- can you cite at least a couple dozen examples of policies that Obama put in place that would have prevented this that Trump then undid?

On the other hand, I can easily cite hundreds of examples of policies Trump took to battle the virus, most of which were opposed by the Democrats such as Obama... see this list...
https://www.donaldjtrump.com/media/timeline-the-trump-administrations-de...

Disgusted
Sat, 04/11/2020 - 3:41pm

"Growers from California to Florida, meanwhile, are leaving strawberries, squash and green beans to rot in the fields as their wholesale market dries up." Boo hoo, why don't these fools sell the crops to the retail market? It's ridiculous that good food is going to waste when there is so much hunger in the world.

A. Ross
Fri, 04/10/2020 - 6:21pm

My heart goes out to all the farmers who are worried about their futures. Greenhouse grower Mike Fusilier said he doesn't think it's fair that people can't shop for his flowers. Nothing about the corona virus is fair. Neither is it fair for people to be out and about shopping as if nothing is wrong and endangering the public health. As Whitmer said, there is a health crisis and an economic crisis. We have to think about human lives first.

James Smith
Sat, 04/11/2020 - 2:04pm

I fully agree with you besides you don't plant flowers until the end of April at the earliest the closer to the end of May is best after the ground warms up and the nights stay warm

Times a changin'
Sat, 04/11/2020 - 3:39pm

Dairy has been going the way of the Blacksmith for awhile. More and more people are going vegan. Smart farmers are switching crops to soy, oats, almonds, rice, mung beans, etc. Demand is growing fast for dairy alternatives and related products. Not so smart farmers are spending $600,000 on new milking machines and trying to ramp up production, only to dump the milk! How dumb is that? How long will our taxes have to subsidize a failing industry with no future? Stop SOCIALISM. Follow the market.

Jeff
Sat, 04/11/2020 - 8:27pm

Abortions have not been classified as "non essential" procedures in Michigan. Why not? Whitmer and her leftists are still thrilled to promote and condone the murder of the unborn child even in these times. She cares about lives? Think again.

Pro Life
Sun, 04/12/2020 - 11:08pm

Abortion? We are facing a plague. Grow up.

middle of the mit
Thu, 04/16/2020 - 2:50am

Pro-life for the living!! WE would like to be included too!

So sad
Sun, 04/12/2020 - 11:09pm

Jeff, is that the only way you can get her to keep your baby, by force?

Joanne
Fri, 04/10/2020 - 9:21pm

It would be nice if people did do there part and not travel like order. We live in a northern community with limited health care and supplies. We have a lot of folks coming from the highly affected areas and coming up to northern Michigan and potentially spreading the Virus. We live in a northern community where there is a lot of elderly folks since this is a resort community. They tax our system when we do not have the virus. Stay home

Agnosticrat 2.0
Fri, 04/10/2020 - 9:45pm

Trump
-Merica!

R Pasola
Sat, 04/11/2020 - 8:36am

Agreed.

Deanna
Fri, 04/10/2020 - 10:30pm

People need to grow food and be able to purchase fresh vegetables and dairy products. Whitmer wants people to starve? She is driving our state into poverty and no amount of money from the government will bring back respect and dignity to workers, farmers and their families.

A.Ross
Sat, 04/11/2020 - 9:21am

Michiganders are able to shop for vegetables, milk, and other groceries. They can't at this time shop for flowers, as they are not essential to sustain life. Mitigation is the best tool we have to save lives!

middle of the mit
Thu, 04/16/2020 - 2:59am

Deanna,

I don't know where you live, but I am pretty sure that I can assure you that you don't have enough property or enough seeds to feed your family and even if you did, you wouldn't do the work that Americans pay illegal immigrants to do for them because the work is too hard.

I am NOT sorry that I have to be this blunt anymore.

I refuse to apologize to those who have no compassion or empathy for those who DO THE WORK THAT KEEPS THE COUNTRY RUNNING AND FED. And that doesn't include Fall Street or "job creators"

WE should be worried about people right now.

If you can't figure that out, that is not my moral failing.

Pro-life for the living!!! WE should be included too!

10x25mm
Fri, 04/10/2020 - 10:55pm

Governor Whitmer's vision for Michigan business: Let Them Buy Lottery Tickets!

Yawn
Sun, 04/12/2020 - 11:12pm

10x25mm's vision for Michigan citizens: Let Them Die, but First Defund the Schools!

Don
Sat, 04/11/2020 - 8:24am

People HAVE started to stop consuming milk!
They shot the poor cows up with drugs to make them produce more milk and the drugs go into the milk !

No Farm Pus
Sat, 04/11/2020 - 3:26pm

Drink nondairy milk, much healthier. No natural hormones, unhealthy fat, antibiotics, steroids, cruelty. Stop raping cows and slaughtering their calves for veal so you can have milk for your cereal. Let calves drink their mothers' milk. Save water used for cows. Stop cow greenhouse gases. Stop manure from contaminating our land and water. Stop cruel CAFOs.

Richard scott
Sat, 04/11/2020 - 8:28am

Local farmers who sell from home should be able to have a socially distanced market .
Milk seems to be a need and safe transport.
Once testing available then care givers, hair dressers, therapists as well as customers will know who is safe. Figuring out who has and who spreads is paramount. One infected working as a sour chef, or pouring beer, or cutting hair or visiting who is shedding virus can be disastrous
Do we need buy tests fro S. Korea?

10x25mm
Sun, 04/12/2020 - 7:15pm

The Detroit News has a long form story today on the continuing COVID-19 testing SNAFU titled "False negatives raise doctors’ doubts about coronavirus tests".

https://www.detroitnews.com/story/news/nation/2020/04/12/coronavirus-tes...

None of the Michigan medical laboratories involved in COVID-19 test analyses have the ISO 15189 certifications which vet laboratory management practices. Instead, they get CLIA certs which tell you their lab techs are alive and can fog a mirror because this is all that is required to get reimbursed by CMS.

The CDC, FDA, and other states' laboratories are little better. How we got into our testing jam. We have the most accomplished, best funded medical bureaucrats. Unfortunately, they are not very apt at their required core competencies.

Be careful what you wish for. You might even get it. All the scientist worshippers here will discover their heroes have feet of clay.

middle of the mit
Thu, 04/16/2020 - 3:18am

10x25mm,

Do you realize what you just posted? Do you understand it at all?

A false negative means that people tested for NOT having the virus, That means they had it, they were let go to transmit it amongst the populace and then they were found to actually have it.

Does that sound in any way Like it is in favor of what you are saying in your post?

Because what I got is that there are false negatives, Even with testing, they can't define everyone who is transmitting it. Do you understand that?

So if you could, stop calling this calling this a hoax.

You just admitted it wasn't.

Again, just so I am making myself clear, a false negative is a positive. Do you understand that?

Clifford Babcock
Sat, 04/11/2020 - 8:52am

drumpf has been crushing farmers since the electoral college put his pathological lying *** in office. Want to discuss the dotard tariffs?
We also have a restumblican majority in Militiagan that controls the money.

Trump2020
Sat, 04/11/2020 - 10:07am

I see some TDS going on here

To Dotes
Sat, 04/11/2020 - 3:46pm

Yep, you have it if you vote for him.

Diane
Sat, 04/11/2020 - 9:15am

We are in a pandemic event unlike anything seen in more than 100 years. Michigan has been hit hard. Prioritizing lives over money is critical. There is a balance, sure, and we could all second-guess our Governor a million ways to Sunday, but does that help all of us get through this dreadful time? Let's shoulder in, get through this, save lives, and when we come out on the other side, go shopping like crazy and help all our Michigan brothers and sisters get back on their feet.
Hang in there, business owners, we ARE coming back and we will be spending like crazy. Just the THOUGHT of being able to shop without fear...oh the joy. (smile)

Siggy
Sun, 04/12/2020 - 9:24pm

Diane,

You are delusional if you believe that to be true. It saddens me to see so many people believing this is worse than even a blad flu season. It appears that a good percentage of the population has simply lost the ability to reason. sigh.

Bill
Sat, 04/11/2020 - 9:53am

Open the state except for the five counties in the southeast that have the majority of the cases and allow them to open as they become stable and safe. There is no reason choke the entire state until the Detroit area is ready to go. More lives will be lost to a destroyed economy than to Covid 19 if we continue to restrict every thing state wide.

Al Dullpound
Sat, 04/11/2020 - 12:03pm

That's racist. You only want to shut those counties down because you hate black people.

George
Sat, 04/11/2020 - 12:32pm

Sounds pretty absolutist to me. Where are you getting your irrefutable facts from? Please post the sources.

Anonymous
Sat, 04/11/2020 - 3:52pm

You have no idea who is spread the virus or even who has it. What nutjobs to think it's only in the Detroit area! New cases are happening all across the state. There is a racist undertone to the comment, but also a dim-wittedness. Funny how the longer people fight this, the longer it will take to go forward. Stop being childish.

Anonymous
Sat, 04/11/2020 - 5:24pm

That's completely false. "Flatten the curve" models of mitigation are specifically designed to make the infection window longer. If you want the quickest turnaround, you would actually try to infect everyone at exactly the same time. On top of that, the only we are going to be able to prove that any of these measures save lives would be to actually overrun the hospitals in order to calculate how many additional deaths there are. Otherwise it is all purely estimation and speculation.

Shepard to Herd
Sun, 04/12/2020 - 11:17pm

That's what Boris Johnson wanted before he went into the ICU. As PM, he probably got a ventilator. The chances are probably more hit or miss for regular people.

James F Bish
Sat, 04/11/2020 - 4:18pm

I refer you to Naomi Klein's book "Disaster Capitalism" & more recent writings & postings to understand how the process of consolidating economic power in the hands of the corporate elite during/resulting from natural & man made disasters, small & large , works. This one is historic.

Carolyn
Sat, 04/11/2020 - 5:36pm

People are hungry, but have no money. This is not necessarily just due to the virus, this is an on-going problem. We have plenty of food, that rots in the field because we are afraid someone might just benefit who either does not deserve it or they might get something that I don't get and that is unfair. What is unfair, is a country that is willing to allow food to rot rather than caring for those who need it. The USDA needs to stop handing out money and start buying the excess food for lunch programs and food banks. They know exactly how to get it to those who need it the most. I wish people could just stop being so worried about themselves and think just a little bit bigger. As a farmer I would much rather sell what I produce and make some profit then keep on taking out gvt loans or relying on grants. Can the governor step in and buy food with some block grant money?

DJ
Sat, 04/11/2020 - 11:16pm

While this story isn't about garden centers, you have the comment "Michigan greenhouse plant and flower growers, meanwhile, say a new Whitmer executive order issued Thursday that includes the closing of retail plant and garden centers threatens their livelihood as well." But the linked Executive Order says "in stores of over 50,000 sq ft... close areas of the store... garden centers." That wording sounds like small individual garden centers could remain open. Or is there a previous order that declared them non-essential?

Darrell
Sun, 04/12/2020 - 10:31am

Ask Lying and Denying Trump for more money. He takes care of all farmers.

Darrell
Sun, 04/12/2020 - 10:33am

Ask Lying and Denying Trump for more money. He takes care of all farmers.

Jannan J. Cornstalk
Mon, 04/13/2020 - 5:59am

Since the farmers are unable to give to schools and other organizations why not give to pantries and the people out of work?

Milton Redman
Mon, 04/13/2020 - 12:54pm

If the farmers give away all their products, it will lower the demand for their products and cause the prices to drop further, causing them further economic ruin. It's all a simple supply and demand curve- demand dropped while supply remained consistent, which resulted in crashing prices and less profit for farmers. Farmers tend to take on heavy loans to grow food and then use the profits to pay back loans- if profits evaporate, they'll run out of cash to pay back their loans. They'll default, the banks will face further pressure (unless they are bailed out), and the family farm will be abandoned. Eventually enough farmers have lost their farms that the supply will drop, which will raise prices back up again so farming can be profitable once again. It's all pretty easy to figure out.

That being said, this Economic Destruction wasn't inflicted by a typical business cycle- this sucker was man made. China created the virus and released it (perhaps by accident?) on the world, government bureaucrats churned out laughingly inaccurate models and projections, and Governors and other politicians over-reacted to that bad data by making hasty and bad decisions. The damage is done though. Now we can only hope that people wise up and we re-open the economy as soon as possible.