Home News 55 % of grain farmers fear they can't cover production costs: GFO survey
55 % of grain farmers fear they can't cover production costs: GFO survey
on: June 04, 2020 In: News
By Tom Collins
Ontario grain farmers are concerned that this year's crop could be a money loser due to COVID-19.
Sixty-one per cent of respondents to a survey from the Grain Farmers of Ontario said they are concerned about their business's ability to survive this downturn.
"Keeping this industry stable must be a priority for our governments, and we are shocked at how little acknowledgement the importance of grain farming has been given," said Grain Farmers of Ontario chair Markus Haerle.
The GFO was among many farm groups last month that asked the federal government for $2.6 billion in funding to help the agriculture sector survive the COVID-19 crisis. The federal government offered $252 million, none of it going to grains and oilseeds. Haerle was livid. "The Canadian government does not give a hoot about Canadian grain and oilseed production," he said. "It's actually despicable having a government that treats the grain and oilseed sector this way."
Ontario federation of Agriculture president Keith Currie said the federal government offer was like watching your house burn down and the guy who you need help from "comes along with a pail of water and says good luck."
GFO survey results, released in mid-May, revealed how serious crop farmers see their situation:
• Eighty-six per cent of respondents expect their net income to be reduced in 2020;
• Over half of grain farmers are already seeing a reduction in sales and another 24 per cent are experiencing cancellation or delays of existing contracts;
• One third are experiencing cashflow issues and another third expect issues in the near future;
• 55 per cent fear they won't be able to cover the cost of production; and
• 77 per cent of grain farmers want to see government support equivalent to what the U.S. is giving its farmers.
But there are some upsides. North Gower grower Jeremy Nixon, who farms 2,600 acres at North Gower, said that his contracts for June and July are still on the table. He said he was also more aggressive with forward contracting his corn and soybeans as the COVID-19 situation developed. As of May 25, he had forward contracted 60-70 per cent.
"Assuming Mother Nature works with us, it should be a profitable operation," he said. "It's going to probably mean some equipment or other major assets will be have to be put on hold to wait and see what the marketplace does to us."
Ian McGregor, who crops 500 acres of corn and soybeans in Renfrew County, is not so optimistic. He said farmers were already feeling the pinch due to trade wars with China.
"We're all concerned about the year and how we're going to be profitable," he said. "If prices don't come up from where they are, it will be break even at best."
Farmers hope the great planting season so far will help with higher yields, which would help offset the lower prices. Despite the challenges, there are no plans to reduce inputs, McGregor said. "You still want to grow a good crop. "We'll be analyzing everything. If a field needs to be sprayed, we're going to do that. We'd like to reduce costs if we can, but we're not going to jeopardize the crop itself just to save a few dollars."
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