High feed prices are affecting small farms

Rising feed costs are especially hard on small farms.

Sam Benson runs such a farm in Scott County, where he keeps a menagerie of animals — from hooves to wings. He became accustomed to paying $11.50 for a 50-pound feed bag.

"Now, if you can touch it for under $17, buy it," he said.

Supply-chain shortages can be as troublesome as price. Most of the time, Benson buys feed from box stores. When it's on sale, the price is reasonable. But it's not always available.

"I'm finding that a third of the time, they don't have it and you have to buy the more expensive stuff," he said. "I'm pinching lots of pennies to try and save lots of money."

He grinds his own feed to cut costs, but different animals require different nutrients. Although it's more expensive, he has no choice but to pay up in order to keep his animals healthy.

"You can't starve a profit," Benson said. "No good farmer has skinny livestock through his own doings."

At his farm in LeClaire, Benson keeps a variety of birds, including quail, chickens and pigeons. Egg prices increased everywhere, including at his farm. At a time during the season in which hens lay fewer eggs, he also had to offset other cost increases, resulting in $5-to-$6 per dozen eggs.

Other aspects of the farm were affected by the economy, too.

When prices go up, people buy fewer delicacies, such as rabbit and lamb. When that happens, farmers like Benson must sell animals at auction, and the profit drops significantly. In that regard, he said, farming is one of the few business in which product is bought at retail price and sold at wholesale.

"Compared to selling it privately, it's a discounted price," he said of auctions.

He has a handful of regular customers, but they typically butcher and resell themselves. His buyers have been understanding about cost increases but have not been buying as much meat as they did during or before the pandemic.

Wesley Declercq co-owns LW Cattle Co. in Hillsdale. He typically sells directly to consumers and so far has been able to keep up with inflation and demand.

"I think three years ago we sold 40 carcasses," he said. "This year we will be around 60 to 65."

While the COVID-19 pandemic created problems for consumers and producers, Declercq said, it also caused many people to be more health conscious. In the end, the awareness helped boost his sales. 

"I would definitely say with COVID and how the grocery stores went scarce; people just like to know they have enough meat that’ll last them a whole year or six months, depending on how much they are willing to buy," he said. "And they like knowing where their meat comes from."

Over the past few years, he has been able to expand the farm, but also had to raise prices about 10%. It's right in line with the state of the economy, he said.

"The number one feed for cattle is byproducts for corn, and with the price of corn increasing, that brings it up," he said. "Feed cost is the number one input for a cow."

According to the Iowa Corn Growers Association, 30% of the state's corn is used to feed livestock and 57% is used for ethanol purposes. Less than 1% is sweet corn, and the remainder is grown to create other products.

Ryan Drollette, a farm management specialist with the Iowa State University Extension Office, said rising input costs were to blame for the volatility in pricing.

For corn and row crops, farmers are seeing input pressures because the cost of seed, fertilizers and labor are all rising, creating a domino effect.

"It's just a vicious cycle that we watch as one hits the other," Drollette said.

According to the USDA, anhydrous ammonia prices in Illinois averaged $1,153 per ton in August 2022 and climbed to $1,429 per ton in November of that same year. In February 2023, the price had come down 14% to $1,237 per ton.

Drollette said one reason the price rose was because of the war in Ukraine. According to researchers at the University of Illinois, the United States imports about 12% of the nitrogen used in fertilizers, 9% of phosphate and 93% of potash.

For Sean Wright, this translates to about a 30% increase in seed prices. At Hollow Maple Farms in Bennett he has 240 acres that produce a mixture of row crops, fruits and vegetables.

To get to the Freight House Farmers' Market in Davenport, he has to travel about 70 miles round trip. Factoring in the cost of diesel, its an expensive endeavor, he said.

Prices have remained relatively stable, but as the weather warms and produce becomes the main seller, Wright is concerned about having to raise prices to keep up with inflation. But he's hoping demand will keep that to a minimum.

"It seems like when prices go up in the grocery stores, people will seek out other places, so hopefully that helps even it out," he said.

Brad Muesing operates Brazy Creek Farm in Cedar County. On Saturdays, he makes his way to farmers' market and parks across from Wright. The cost of seed is affecting him as well, he said.

Feed prices have come down, but he predicts they'll go back up because of the war in Ukraine. To feed his animals, Muesing buys feed in bulk. Since 2015, he estimates the cost has risen $300 per ton.

Sheep, goats, pigs and nearly 500 hens call his farm home. With egg prices being so volatile, Muesing was able to maximize on that for a time and sell thousands of eggs in a single weekend, he said.

"Sales went up really fast," he said. "I could keep up. In the middle of the spike there, I was selling 120-170 a dozen down here."

But replacement stock is hard to find. Because of the Avian Flu, entire flocks are being wiped out. As of March 1, more than 58 million birds had been slaughtered since the outbreak.

"That's the way regulations are. If there are two birds that have it in a building of 50,000, everything in it has to be destroyed," he said.

During the winter, hatcheries were working to produce replacement stock. But many of them are selling quickly and with the flu continuing into another season, Muesing is concerned migration will impact the already-struggling poultry industry.