ENVIRONMENT

Overnight, his business vanished: Farmers reliant on restaurants suffer during pandemic

Sarah Bowman London Gibson
Indianapolis Star

Greg Gunthorp works in one of the professions deemed essential by the state and federal government as the coronavirus outbreak rages on. He is not a health care worker or in public safety — he is a farmer.

He raises pigs, chickens, ducks and turkeys. But seemingly overnight, the market for Gunthorp’s products vanished. That’s because the people he sells to — restaurants, universities, amusement parks — have closed their doors.

“We have whole categories of species we just plain don’t have customers for right now,” said Gunthorp, who estimates that his customer base has dwindled to less than 20% of previous levels. “We’ve spent 20 years building these markets, and that literally just blew all up last week.”

At a time when many grocery stores can’t keep their shelves stocked, small specialty farmers across the Midwest are hoping to shift strategies as quickly as the restaurant markets they served have unraveled. Some are looking to sell directly to consumers.

Gunthorp Farms owner Greg Gunthorp poses for IndyStar in LaGrange, Ind., Tuesday, Dec. 3, 2019.

Still, some in the agriculture industry worry that some small farms won't make it through the coming months. 

Larger farm operators, too, are feeling the effects of COVID-19 outbreak, as they wonder if they will have enough labor, if prices will hold and if the government will provide relief.

“It’s clear that this pandemic is really challenging and threatening all of society,” said John Piotti, president of the American Farmland Trust, a national group that works to protect and preserve farms. “But our farmers, who are the ones responsible for putting the food on our table, are experiencing particular challenges and they need our help.”

Impacts happening now

The farmers that are being hit hardest right now, Piotti said, are those that are called direct-to-market farmers. Like Gunthorp, these are farmers that sell to restaurants, schools, farmers markets, amusement parks, etc. — the very places social distancing policies have forced to temporarily close. 

Across the U.S., these producers accounted for $2.8 billion in total sales in 2017, according to a recent economic assessment from the National Sustainable Agriculture Coalition. But from just March to May of this year, as reported in the assessment released this week, that same sector could see a decline of nearly $700 million in sales.

What’s more, 85% of the producers that make up that sector are classified as small farms. And there are hundreds of these producers in Indiana and thousands across the Midwest region, according to Kris Reynolds, Midwest director with the Farmland Trust. 

Heather Spray is one such farmer. She and her husband started Joy Lane Produce — which is located in southeast Illinois and primarily serves the Evansville area — four years ago. They operate a local greenhouse that grows lettuce and other greens, and roughly 85% of Joy Lane’s business is to locally owned restaurants. 

But most of those restaurants have had to close, and only a few are doing curbside service. On Thursday, Spray’s husband set up a stand outside of one of their normal restaurant customers that is still open for takeaway, trying to sell greens to those that are coming in to pick-up food. 

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It’s something, Spray said, but Joy Lane has been at less than half of its normal sales in the last couple weeks — despite these efforts. They are donating whatever they can’t sell to local food banks. 

Part of the problem, she said, is the uncertainty around how long restaurants and other businesses will be closed. Spray and her husband don’t want to plant less right now if things do open up in a couple weeks. But if the closures are extended, then they will have missed their window to make those decisions.

“If small local restaurants can’t get going in the next few weeks, I’m not sure how long they will be able to keep their doors open,” Spray said. “And if they don’t make it, then we will have to pick that business up elsewhere or shift our market strategy.”

Gunthorp is planning to sell directly to consumers, rather than his usual restaurants and universities. He has posted on his website that his products are now available for purchase, and he is looking to partner with some other farms that already had that structure set up. 

“Businesses and farms that are going to be successful through this are going to have to make more changes in weeks than most businesses have to make in years,” he said. 

Gunthorp Farms owner Greg Gunthorp, walks around the processing barn in LaGrange, Ind., Tuesday, Dec. 3, 2019.

He had built his business model on partnering with market customers that use the full animal, but most in the general public just want specific parts — such as chicken breasts — or ground products. That means many parts of the animals get wasted, Gunthorp said. 

For consumers struggling to find products they want, or those wanting to support their local small businesses, Gunthorp and Spray recommend checking farms’ websites and social media channels. Other options are to reach out to organizers of local farmers markets or check a site called Market Maker to make the connections.

Still, if Gunthorp is able to tap into the direct-to-consumer market and keep that going once his regular customers are able to reopen, this could present an opportunity to grow his farm in the long run. 

“And if we don’t, we likely could shrink through this,” he said. “It really will shuffle the deck.” 

Preparing for a pivotal time

The same goes for larger farms, too. As April and May planting seasons approach, crop farmers are aggressively preparing for one of the most pivotal times of the year, all while working to adapt to the challenges inevitably coming alongside the COVID-19 crisis.

The average age of farmers is 57.5 years, according to the most recent Census of Agriculture in 2017. About 34% of farmers are older than 65, the age at which the Centers for Disease Control and Prevention warns people reach a higher risk for severe illness. 

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However, as members of the food production industry, farmers don’t have the luxury of sheltering at home. Nor, many say, would they want to.

Social distancing is especially important for farm employees during this time, said Scott Irwin, the Laurence J. Norton Chair of agricultural marketing at the University of Illinois. Losing the manpower of just one employee to virus exposure could throw a wrench in operations for any farm — losing more could potentially be “devastating.”

“Infections could decimate a labor force for a livestock operation,” Irwin said.

In light of these potential complications, farmers have a window of time to decide how they will plant this season, Irwin said. Some may choose to lean on planting more soybeans than corn, he said, in part because soybeans have a wider planting window in case logistical problems come up.

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Some farmers are using unique methods to maintain social distancing while still accomplishing the tasks required at this time of the year.

Erich Eller, owner of ForeFront Ag Solutions, a crop consulting business based out of Huntington, Indiana, said he is using unique technology with some of his clients to maintain social distancing while still accomplishing planting operations. This includes weather stations and satellite or drone imagery to keep tabs on his clients’ fields during this time. 

“This year, we’re doing more over the phone,” Eller said. “We’re using technology to continue to gather information in the field that we can make decisions upon.”

Most of the farmers Eller works with are accustomed to spending hours on end alone in a tractor cabin or in the fields, he said, so many are optimistic about adapting in the coming months. 

The real fear, many say, is of what comes next.

'They would expect losses'

Falling crop prices and recent tariff wars have placed financial pressure on many Midwestern farmers.

Now, some worry, the economic decline caused by the coronavirus pandemic could exacerbate the issue. Since the pandemic gained speed this month, corn and soybean prices have plummeted. With fewer cars on the road, for example, corn for ethanol isn’t as needed, Piotti said.

If the virus is short-lived, the impact on farmers will likely be small, Irwin said. However, if it continues along the “darker paths” predicted by some medical experts, he said it will add to the economic misery some farmers have been experiencing.

“Considered in isolation, (falling prices) could really drive almost all of our corn belt crop farmers into the red,” Irwin said. “They would expect losses.”

The overall picture, however, might not be so dire. Irwin said financial help from crop insurance, Farm Bill aid and the Market Facilitation Program, which was created to help farmers impacted by the tariff war with China, will soften the blow.

“There are these additional safety nets,” he said. “On the surface, the drops in prices are very scary … but that’s not the full picture.”

A $2 trillion stimulus bill passed by the Senate Wednesday and House on Friday provided some support for food systems. 

The bill allotted $48.9 billion to the U.S. Department of Agriculture for responding to the pandemic. Also set aside was $14 billion for the Commodity Credit Corp, which gives direct financial assistance to farmers. Another $9.5 billion will assist livestock, dairy and specialty crop farmers, including those who sell directly to restaurants and farmers markets.

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American Farmland Trust Policy Director Tim Fink said the organization worked closely with Congress to include support for farmers. The group also launched its own Farmer Relief Fund on Tuesday. 

The fund will provide quick cash to eligible farmers, focusing on those that are direct-to-market, at first. The grants will likely be around $1,000, which Piotti acknowledges is not very much and won’t cover farmers’ losses, but could be what they need to retool their website, for example. 

In just under a week, the fund had raised around $75,000. Piotti hopes they will be able to raise more than $1 million. 

The application is expected to stay open until mid-April with the first grants being made by May 1. 

Estimates on how long the coronavirus pandemic may last vary, and the uncertainty makes it hard for farmers to plan the rest of the season, Irwin said.

“This is so fast-moving and there’s still so much uncertainty about the depth and length of the coronavirus pandemic, we’ve still got to kind of let this thing run its course,” Irwin said. “It looks really bad right now … but in these kinds of situations, there’s a lot of uncertainty."

Call IndyStar reporter Sarah Bowman at 317-444-6129 or email at sarah.bowman@indystar.com. Follow her on Twitter and Facebook: @IndyStarSarah. 

Contact IndyStar reporter London Gibson at 317-419-1912 or lbgibson@gannett.com. Follow her on Twitter @londongibson.

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IndyStar's environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.