Whatcom County’s farmers and ranchers have always had to adapt and innovate. Now is no different.
“Twenty years ago, hard work was enough to guarantee a living,” said Galen Smith, longtime owner of Coldstream Farms, a dairy in Deming. “Today, farmers and ranchers need to be more sophisticated to survive.”
Like many Whatcom County farmers, Smith has been working for decades — long enough to see advanced financial and business strategies become increasingly important to his business. Smith’s dairy has thrived because of his team’s increased business acumen, growing the farm from 400 to more than 1,800 cows. Coldstream’s growth is the result of hard work and Smith’s ability to use financial markets to lock in ingredient prices and project his margins. As a result, 75% of his input prices and sales are in place well ahead of time, helping his business better withstand unexpected fluctuations created by turbulent markets.
The strategic management of feed and other ingredients is one reason Smith can be relatively calm about the long-term impact COVID-19 will have on his business.
“Without a doubt, a temporary economic contraction impacts everyone, and it will impact the county’s producers,” Smith said. “However, there is risk priced into our business well ahead of unexpected events. The dairy industry has specific insurance programs for producers that come into play during moments like the one we are living through. Long-term, I do not expect COVID-19 to decrease demand for dairy products.”
The durability, resiliency and importance of agriculture are big reasons why Whatcom County should recover from the economic fallout of the virus. The county has over 100,000 acres of productive farmland and more than 1,700 farms. It generates more than $360 million in annual revenue and is in the top 3% of the most agriculturally productive counties in the entire nation. Statewide, agriculture is the second largest industry in Washington, after aerospace.
While the industry is a staple of the Pacific Northwest and Whatcom County economies, managing a thriving operation requires more than just advanced business and financial strategies. Producers also need a sophisticated understanding of trade policy and the regulatory environment. The United States-Mexico-Canada Agreement, the trade policy adopted to improve on and replace the North American Free Trade Agreement, has allowed producers like Coldstream Farms to enter new North American markets without having to compete against Canadian subsidies.
“The USMCA was a huge win for us and a big improvement over previous trade policy,” said Galen Smith. “We could not sell our product in Mexico when we were competing against farms subsidized by the Canadian government. The USMCA leveled the playing field for us. It allows farmers to compete on the quality of our product — and I believe when we are competing on quality, American farmers and ranchers will win, hands down, every time. Especially our Whatcom County producers.”
The impact of the regulatory environment does not end with trade policy. Zoning restrictions limit access to water rights and create uncertainty for producers. Complex permitting processes also slow down necessary projects and improvements. The result can turn the simple construction of a hay barn into a years-long process. Regulatory restrictions can frustrate producers, but the industry has statewide champions supporting policies that could open new markets for many Whatcom County farms and ranches. Sen. Doug Erickson, a Republican from Ferndale, recently led the effort to pass Senate Bill 6382, which would allow custom slaughterhouses to sell meat directly to consumers. The bill would let those slaughterhouses sell beef, pork, lamb and other meats by the cut to customers. Erickson believes that the legislation, which is known as the Prime Act, will eventually receive support from the state’s often-conservative agricultural producers and from liberal supporters of the “buy local” movement. While the session ended without the bill making it to the governor’s desk, the push to open new markets to Whatcom County producers and consumers is likely to continue. “Sen. Ericksen’s bill is an example of the type of legislation we hope for,” said Tony Larson, president of the Whatcom Business Alliance (and publisher of Business Pulse). “It is not partisan, it increases the prosperity of local businesses through innovation, and it can unite both liberals and conservatives behind a common-sense idea. We would strongly support future efforts to pass legislation like this and open our county’s producers to new local markets. ”While tension between the state’s urban centers and rural agricultural communities ultimately influences agricultural policy, there is hope for common ground. One way to find common ground is through better communication.
“Believe it or not, the state’s urban population and the rural farmers and ranchers share common goals,” said Pam Lewison, director of the Washington Policy Center Initiative on Agriculture and a longtime family farmer. “Both want to see Washingtonians buy local. Both understand that environmental concerns play an important role in maintaining a sustainable agriculture industry. To varying degrees, both express frustration that many consumers don’t understand the complexity and importance of our food supply chain. However, there is a struggle to find a common language.”
While it is hard to identify positives in the coronavirus outbreak, the importance of farmers, agriculture and strong local supply chains was vividly illustrated when residents of Whatcom County became concerned about food shortages. Those concerns are understandable. However, Lewison echoed other producers when she said the area’s farms remained on duty, even during the crisis.
“Gov. Inslee’s decision to deem the agricultural industry essential was wise, and inevitable,” Lewison said. “I’ve spent a good portion of my life on a farm, and even in an emergency, work must go on. The pandemic challenges farmers with potential labor shortages and the need to implement appropriate human resource policies, provide protective gear, and adhere to social distancing procedures. The last of those could present challenges for berry producers. However, farmers and ranchers will always do what they do best: see a challenge, identify a solution and get the job done. ”Over the past 20 years, Whatcom County’s agriculture sector has endured near-constant change. Small farms have had to develop innovative strategies just to compete. The local, regional and national dialogue around genetically modified foods challenges producers to communicate complex issues of food safety and farm productivity in a way that helps consumers understand exactly what a genetically modified organism actually is. Shortcomings in trade policy and the growing relevance of international financial markets are additional sources of constant change. Really, the only constant in agriculture is change — but area farmers are ready to cope with change and overcome any obstacle that comes their way. Even a pandemic.
“I am and always will be proud to call myself a Whatcom County farmer,” said Galen Smith. “I have traveled across the region, across the country and across the world. I might be biased, but many of the best, smartest, toughest, most resilient people I have ever met live in this community. They are farmers and ranchers, for sure, but they are also leaders. They are innovators. They believe in this county and its people. The months ahead will present challenges, but I guarantee you that the ag community will help lead us through those challenges.”
Farming, ranching and agriculture aren’t the most glamorous industries. They literally require a willingness to roll up your sleeves and get your elbows a little dirty. They also require an ability to roll with the punches and to make the best possible hand out of the cards the world deals you. No one expected or wanted a pandemic that caused a temporary shutdown of the local, state and national economies, but farmers and ranchers live with the unexpected and unwanted nearly every day. Some days, they need a little sunshine, and all they get is rain. Sometimes a deer gets into a crop. Sometimes milk prices plummet. If the expected was all they could rely on, Whatcom County farmers would have a lot less to worry about. But that isn’t how farming works. In farming, as in life, the only thing you can count on is change.“Farmers and ranchers might be quiet leaders, but they are leaders,” Pam Lewison said. “They always will be. 2020 will differ from what we forecast for the industry. How different will it be? Time will tell. But in the long run, agriculture will continue to be one of Whatcom County’s most essential industries, and in the short run, the importance of agriculture shows just how critical some of our traditional industries are to local economies.”
In other words, the unexpected events of 2020 are a reminder of how important the basics are: an evening spent with your child, a healthy grandparent, a roof over your head and a strong local agriculture sector that will keep food on your table.