USDA’s Tough Love
November 20, 2019 However you come out on the current administration operating in the White House these days, it’s safe to say that “bedside manner” is not one of its specialties. This point was made infinitely clear with the comments of our own Secretary of Agriculture, Sonny Perdue, to a roomful of producers at the World Dairy Expo in Madison, WI, last month.
Unless you’ve been too busy serving your own farmers to keep up with the news, you probably caught wind of his much-publicized remark during a roundtable discussion. A question about the sustainability of small dairy operations garnered this response from Mr. Perdue: “Big get bigger, and small go out. It’s very difficult on economies of scale with the capital needs and all the environmental regulations and everything else today to survive milking 40, 50, 60 or even 100 cows.”
That’s the kind of “tough love” you don’t get very often from those who work on your behalf, in particular when the audience is the American farmer. And it also came on the heels of Perdue’s ill-advised recounting of the old “whine cellar” joke at a farm show in Minnesota (what do you call two farmers in basement?). I try to imagine a USDA Secretary from New York State reciting that joke to a room full of cotton farmers. “Well, bless your heart.”
Given the artificially induced burdens farmers are facing from the tariffs, along with the enduring economic slump that agriculture has been battling through, Perdue’s approach – even as one farmer to another – landed like a gut punch on many producers.
A less publicized but equally important comment made by the Secretary included, “The best way to ensure sustainability is profitability.” Taken together, this seems to signal a colder and more business-oriented approach to farmers by USDA. If your financial house cannot be put in order to manage the variables and vagaries of modern farming, you need to straighten up or get out.
While many farmers expressed outrage over the Secretary’s comments and tone, I can also imagine a fair number of farmers, retailers, and others in agriculture nodding in silent agreement. Professionalism and profitability should be the standard for farming, and what the USDA supports.
The unfortunate implication in the secretary’s abrupt comments is that the small cannot survive. The comment should have stuck to profitability and professionalism – farm operations both large and small without a clear business and profit plan cannot be sustained, and it’s not the USDA’s business to create policy to keep unsustainable ag businesses afloat. Scale is likely going to be an issue, but at the end of the day, farm size is not in itself the issue.
We know this all too well in retail, even though our struggles are less publicized and generate fewer tears out in the public. The regulatory and market forces constantly push and pull our businesses and have been a key factor in the transformative consolidation we’ve all endured.
What does it all mean? As retailers, I think it provides us an opportunity to have discussions with farmer-customers that focus on profitability and sustainability as a professional farm operation. What are their short- and long-term plans? What services can we as the retailer provide?
Now more than ever, farmers need trusted partners to weather this unrelenting storm of uncertainty.
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