Watson says farmers will have bad year
Menan farmer Rhett Watson told the Menan City Council April 13 that he expects to lose money this year and that no commodities are really worth the money it takes to grow them.
Watson leases land owned by the city in order to grow crops. He pays $162 per acre for around 65 acres. He said that the production cost of anything he grows on the property would outpace what he could sell it for.
“Commodity prices have just tanked. They are all below the cost of production,” he said.
He asked that the council consider giving him a break on the lease price. He said that if they told him they couldn’t he would honor the price, as he wants to be a man of his word.
However, if they could work with him it would help him make ends meet.
Barley, he said, has gone down tremendously. Once profitable contracts with Busch have gone down 30 percent. He still has barley stored from last year waiting for an October 2017 delivery date.
On land where wastewater is applied, he can’t grow anything for human consumption. He grows feed barley or hay. He said that he would get maybe $3.45 per bushel, or $345 per acre. However, his fixed cost would be $349 per acre, and with paying for employees he could easily add another $100 per acre.
Watson told the council that he is planning to grow wheat, even with worldwide record surpluses in storage.
“I don’t see any scenario where wheat’s going to come up in price,” he said.
Potato farmers are expecting a loss, and alfalfa is still low but getting a little better. In 40 years, he said, he had not seen a market where everything was below the cost of production, and he didn’t want to see it again.
Councilman Keith Nelson thanked Watson for the information, and for providing real numbers.
Mayor Tad Haight wondered if the contract between Watson and the city could have a component to reflect commodity prices. Attorney Kris Meek said that it would become very unwieldy and complex, with the city needing to input how much Watson makes on the acreage.
Nelson said that he wouldn’t be opposed to adjusting the contract.
Watson said that the council didn’t need to make a decision now, but asked them to think about it and reconsider in the summer.