By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
At $1.66, the farmer inside is looking at the losing end of a gamble. Most farmers around Renville are still hanging on to as much of last year's crop as they can, holding out for a price jump that so far hasn't happened and, if the free market keeps on the way it has, likely won't. If a bill comes due, if a machine breaks down, if he needs to buy and set up a new bin to store this year's crop alongside the last, a farmer might sell a truckload. If the price goes back up to $2, he might sell two.
The elevator runs on the same principle. It's essentially a collective arrangement among farmers to market their grain to corporations that sell overseas or put food in American grocery stores. Any farmer can sell his grain to the co-op. And he can buy shares in the business; in a good year, the co-op pays dividends from its net profits. The Bird Island Farmers Elevator Co. is the last small-town co-op in the county. All the others have merged into larger concerns that serve several towns. A fair number of co-ops across the state and the nation have even hooked up directly with giant multinationals: Archer Daniels Midland, and other giants like it, runs co-ops in towns all across the world--a harbinger, perhaps, of "vertical integration" for corn and soybeans down the road.
Because of the current poor prices, McNamara has been hanging on to last year's grain, just like the farmers. Every day managers like McNamara check prices, and every day their inventory is worth less. Nearly 4 million bushels sit in elevators around the county.
"Our biggest problem this fall," he predicts, "is going to be storage." With such an enormous stockpile in the wings, and demand down and going lower, any free-market economist could tell farmers what most of them already know: what they'll eventually get for their grain won't begin to cover the cost of raising and storing it, much less put a dime in their pockets to pay off debts.
McNamara grew up on a farm a mile north of Bird Island. He graduated from college in Willmar, then worked his way up from unloading trucks at the elevator to the manager's desk. The changes he's seen in his lifetime worry, even frighten him. And the future of his business looks grim. "We hear about the Red River Valley and how tough it is up there," he says. "I'm not saying we're in that situation. But we're headed that way. We have a good crop, we just don't have the price. And I tell you--we lose farmers, and we'll lose these small towns. We saw that in the early '80s, when we ran through this same type of thing."
McNamara's elevator is vulnerable in the same way smaller farms are. He's not doing the kind of high-volume business that can keep him solvent through hard times. His small size means his margins are tighter than those of his large-scale competitors--making it more difficult for him, and his farmers, to sit on grain and wait for prices to pick up.
"The way it looks, because the market is so depressed, unless we haveto sell it, we're going to hold on to it and see what the price does. This elevator right now is sitting full of corn. We won't put any grain on the ground. You start putting it on ground, it spoils. Then the elevator is the one that picks up the tab for that. My big concern is, Where are we going to put these bushels coming in this fall?"
At that, McNamara falls silent. The empty truck weighs out, and rumbles across the gravel lot and off toward the highway. Then he says, and there's an edge of anger in his voice now: "I don't want to get to sound like a radical, but a lot of people piss and moan about farmers with their mouths full of food. You have to remember where that food on your plate comes from. These people work their ass off to do it. But they want to make a living, too. We might not see it in our lifetime, but you'll get to a point where it's just a few outfits raising. Then we're going to have high-priced food. 'Cause they're going to say, 'OK, if you want it, here's what you're going to have to pay.'"
"I just heard they sent up another one of them billion-dollar space rockets." Richard Serbus is standing in his front yard by the John Deere, arms crossed, spitting tobacco juice into the driveway. The radio reports that a satellite rocket in Florida exploded on liftoff, a billion dollars' worth of sparks and fire drifting back to earth. In a few hours, Serbus will climb onto his tractor and head out to the fields with a couple of neighbors to bring in hay for the cows. Corn is down another penny. In an hour, it'll be down another. Every penny off the price puts Serbus $200 deeper in debt.
"There's no reason why we can't have a three-dollar base price on corn, and at least six and a half on beans," he says. "The government's more concerned about building a space capsule, or space city, or whatever they're doing up there. But for the ones who are feeding them? They don't care."