Reaping the benefits: Farms just the start of area ag economy

By Ric Dugan/Staff photographer
Cory Forrester, general manager of Forrester Farm Equipment, stands with hay rakes last month at the business north of Chambersburg, Pa.

 

The agriculture dollar starts down on the farm, but it’s hard to say where it ends up and how many times it multiplies along the way.

“There’s a (big) flow of dollars. It can become the cause of a lot of things,” Kurt Williams, general manager of the Lanco-Pennland dairy cooperative, said in August.

The government provides a look at the the initial flow. In Franklin County, Pa., for example, the market value of farm products hit $413.8 million in 2012, according to the most recent U.S. Census of Agriculture.

The census, done every five years, listed that number at $150.5 million for Frederick County, Md., $107.7 million for Washington County, Md., and $35.5 million for Jefferson County, W.Va., to list just a few Crossroads counties.

“It obviously starts with the farm first,” said Brooks Long of Long Delite Farms in Washington County.

But before the food hits the market, there are feed dealers, supply houses, implement dealers, transportation businesses, processors and other ag-related ventures that make it possible.

“It really snowballs, and it really affects a lot of businesses and the economy,” Long said.

By Ric Dugan/Staff photographer
Cory Forrester, general manager of Forrester Farm Equipment, stands with a row of farm equipment last month at the business north of Chambersburg, Pa.

‘Overlooked entity’

Jeff Semler, principal agent with the Washington County extension service, said agriculture sometimes doesn’t register on economic development measurements.

One of those measurements tends to be initial job creation — positions created by a new manufacturing plan or distribution center, for example.

“Quite frankly, ag doesn’t do much of that,” Semler said, noting that farms in this area tend to be well-established and small, family operations that don’t employ many people.

There are exceptions further down the food chain.

The Lanco-Pennland cheese plant near Hancock, Md., employs more than 80 people.

And a Michigan-based egg producer, Herbruck’s Poultry Ranch, plans to employ 190 people at a 336-acre farm in Franklin County, according to Herald-Mail Media reports.

But, in general, the area is dotted with family farms that still tend to be small operations, Semler said.

And even then, ag dollars can go uncounted. Commerce at roadside stands and other small markets probably escapes notice, Semler said.

And some other farm-related dollars — brought in by breweries and wineries for example — might be tallied under tourism instead of agriculture, he added.

“Beer is an agricultural product. … Sometimes the numbers get counted, but they don’t get counted back to agriculture,” Semler said.

There’s also the problem of tracking local numbers down a complex food chain. Milk from a variety of places goes into that Lanco-Pennland plant, for example. Wheat from a variety of places goes into the mill at Camp Hill, Pa.

“Nobody labels a wheat grain and follows it through the system. … We can only follow it to the first door,” Semler said.

“It’s an overlooked economic entity, and I guess that’s because it’s hard to quantify.”

‘You never know’

It’s not overlooked at Forrester Farm Equipment. The family-owned business has been relying on farmers since the late A. Jay Forrster started it in 1976. His five children are now co-owners, with Cory Forrester serving as general manager.

Forrester said implement dealers, supply houses and other ag-related businesses tend to feel the rise and fall of commodity prices, just like farmers themselves. He pointed to the past three years of lower milk prices and related it to his business.

“It’s been in a steady decline the last three years. … The prior three years to that were the best years we’ve ever had,” he said.

But with about 70 percent of the business coming from agriculture, there’s still commerce, even during slow times. Farm operations — feeding cows, tending crops, repairing buildings and equipment — have to carry on.

“They’re in here every day,” Forrester said.

The New Holland dealership works not only with local buyers, but also with the company that makes the equipment.

“We have market share reports, as far as New Holland goes. So they know how many pieces of equipment are sold in Franklin County,” Forrester said.

“We look at that data, and then we say, ‘OK, what are we going to do for next year?’ (But) you never know what the next year’s going to look like. … At the end of the day, it’s still weather-related, it’s still cash-flow related, it’s still commodity (price) related.”

The $20 million business employs about 30 people at stores in Chambersburg and Somerset, Pa.

Forrester said he doesn’t see many first-generation farmers — the initial capital investment is just too high. He does see a lot of “weekend warriors” — people who work full-time jobs in addition to their work on the farm. And most grew up that way, he said.

“They woke up, they went to school, and they came home and they farmed. … A farmer has it in his blood. A farmer doesn’t do it for money,” he said.

“Without them, we’re going to run out of food.”

‘It works very well’

Farmers themselves can benefit a bit from some of that commerce down the food chain.

Dave Forrester — distant cousin of Cory — is general manager of Farmers Union Co-op in Greencastle, Pa. The co-op started in 1938 as a milk co-op for Hershey Foods.

Now it’s main business line is serving as a feed bank. Most member-owners are dairy farmers, with only 3 percent in the beef cattle business, Dave Forrester said.

Farmers bring their grain to the co-op. Nutrients are added and the grain is held then sold back to farmer-members when they need it.

“This is a co-op. We operate at a break-even (margin) intentionally,” Forrester said.

About half the farmers don’t grow enough of their own grain. So the co-op buys more feed to make it part of its bank.

Profits go back to the members on a percentage basis.

“We have about 170 members. It works very well. One of our members can call right to the top,” he said.

Like others in the area ag industry, Forrester said he sees some producers moving into niche markets, from wineries to artisan products. While those numbers are growing, he said they remain a small part of the general ag picture.

Meanwhile, he said, for many people farming continues to be about passion as much as profits.

“There’s just not enough income to cover their costs,” he said, “and that’s why you don’t see first-generation farmers anymore.”