As west central Minnesota’s population steadily declines, so do farm profits. In 2002, 34 percent of the farms reported net losses, even with federal subsidies.
But if the region’s consumers spent one food dollar out of five on home-grown meats, dairy, grains and produce, it would add enough in new farm income to match almost half what farmers now receive in federal subsidies.
That was Ken Meter’s message to more than 300 attending the “Home Grown Economy” conference on April 2 at the University of Minnesota-Morris (see article, page 6). U.S. Rep. Collin Peterson and UMM sponsored the conference; Michael Sparby, AURI project director, was one of the organizers.
Meter, president of Crossroads Resource Center in Minneapolis, taught U.S. agriculture economics at the U of M and has been conducting economic analyses of local food systems across the country.
He studied a 12-county region in west-central Minnesota, defined by Traverse, Grant and Douglas on the north, Renville and Yellow Medicine on the south, and Pope and Kandiyohi counties on the east.
“We have very good data from the USDA about commodities and farms. But we often lack the sense of, what happens to the people who actually raise our food and the people who eat our food?” Meter said at the conference.
“We can’t write good farm policy; we can’t have good local economies … without measuring communities.”
West-central Minnesota includes more than 10,000 farm families, 12 percent of the state’s farms and 17 percent of farm acreage. The area produces $1.4 billion of food annually and raises roughly a
quarter of the state’s sugar beets, corn and soybeans and 14 percent of livestock. “Only one-half of one percent is locally purchased. The other 99.5 percent is going into a commodity stream,” Meter says.
“Even hogs are likely to leave the state to go to a processing plant. … They come back in cardboard boxes,” and consumers pay retail prices for “what we produced in wholesale prices.”
“Farmers have reduced their costs … for the last 20 years. Farmers are managing as well as they can, but return from farming has steadily decreased … farmers struggle to produce food at a loss,” — averaging about a $153 million loss annually.
Production costs keep rising and every year the region’s farms purchase $600 million in inputs. To cover losses, farm families annually collect $167 million in federal supports and earn $80 million in other farm-related income.
Promoting local foods is an important strategy for making farming more profitable and our diets healthier, Meter says. He contends that if the region’s consumers spent just 20 percent of their $354 million annual food budget on local foods, farm revenue would increase by $70 million — equal to 40 percent of what is now collected in subsidies.
“There is clearly a lot of room to grow – as we move to more local systems.”
