Tied to their farmers: Ag town merchants rise or fall

GRAFTON, N.D. -- Mike Sackett has been in business in Grafton, N.D., since 1978. He's seen good times and not-so-good times, but he's never seen anything quite like the 2016 crop season.

In spite of having many diverse businesses, Grafton, N.D. has an economy that is largely dependent upon agriculture. Photo taken April 6, 2017. (Nick Nelson/Agweek)

GRAFTON, N.D. - Mike Sackett has been in business in Grafton, N.D., since 1978. He's seen good times and not-so-good times, but he's never seen anything quite like the 2016 crop season.

"It was a very stressful time for (local farmers). Normally, you can laugh and joke with them, but last fall they were kind of cranky," says Sackett, proprietor of the NAPA Auto Parts store.

Grafton, population about 4,300, is a farm town in northeast North Dakota. As is true in other farm towns, merchants here thrive or struggle along with local farmers. Last year, Grafton-area farmers, and consequently the merchants who serve them, struggled mightily with the elements. Exceptionally difficult growing conditions - some Grafton-areas fields received twice as much precipitation as usual - hammered yields and farm income, leaving producers less money to spend at local businesses.

"It was one of our toughest years (financially)," Sackett says.

Merchants who sell farm equipment and supplies and have a direct connection to agriculture obviously are hurt when farmers struggle.


"There's a direct correlation" between net farm profits and ag implement sales, says Matthew Larsgaard, president/CEO of the North Dakota Implement Dealers Association.

When farmers take in less money, their ability to buy equipment naturally suffers, he says.

But what may be less obvious, at least to people unfamiliar with agriculture, is that all Grafton businesses - like their counterparts in other farm towns - rise or fall with the local farmers.

"Pretty much everything in our economy is tied to farming," Sackett says. "What affects our farmers affects us all."

Grafton businesspeople are optimistic this year will better - it could hardly be worse, given 2016's freakish weather - but last year was a painful reminder that what's hard on farmers is also difficult for the merchants who sell to them.

One example of how Grafton businesses have been affected: B & D Flooring and Furniture has dropped from three flooring installation crews to managing just one, say Brad and Denise Moe, who own and operate it. Brad Moe is the current president of the Grafton Area Chamber of Commerce.

Last year was their leanest financially since they expanded into furniture five years ago, say the Moes, who launched their flooring business in 1997.

Tough year for crops


How bad was 2016 for farmers in the Grafton area?
"It was one storm after another," says Brad Brummond, veteran Walsh County Extension agent. Grafton is the county seat of Walsh County.

The 2016 growing season brought three separate hailstorms, destructive bouts with 80- to 90-mph straightline winds and 40-plus inches of rain in some areas, he says.

"The stress was just horrendous," he says. "We had producers who got less than half a crop, and some who had even less than that. "

Overall excellent yields in the Upper Midwest last year shouldn't obscure severe production problems and greatly reduced yields in Walsh and neighboring Pembina County, Brummond says.

Walsh County, population a little more than 11,100, is in the Red River Valley of the North. The river forms the boundary between North Dakota and Minnesota.

The Red River Valley features flat, fertile farmland. Walsh farmers raise many crops, most notably sugar beets, potatoes, dry edible beans, spring wheat and canola.

Potatoes are particularly prominent; historically, Walsh County is North Dakota's leading spud producer. But the heavy, frequent rains ravaged potatoes, just as they did other crops.

"It would be generous to say our potato crop was half a crop," Brummond says.


The freakish 2016 weather included heavy rains and exceptionally warm temperatures in late October and the first half of November. The moisture delayed potato harvest, further stressing farmers, though the late warm weather partially offset the earlier delays by allowing spud farmers to pick away at soggy, unharvested fields much longer than usual.

"We were digging potatoes on Veterans Day (Nov. 11 in 2016.) I had never seen anybody dig potatoes on Veterans Day," Brummond says.

Because poor yields and drowned-out fields reduced production, potato prices rebounded. That helped farmers who harvested close-to-average crops and who didn't contract to sell their potatoes earlier in the year at low prices. But the many growers with poor crops or who contracted their potatoes previously at lower prices didn't benefit, officials say.

Family living, going forward

No Grafton businesses have closed because of the 2016 ag woes. But some have cut back on employees, with their owners or proprietors working extra hours, the Moes and Sackett say.

Grafton merchants - typically neighbors or relatives or both of the farmers they serve - understand that agriculture is cyclical and plan accordingly, Denise Moe says.

"In a farming community like this, you're always somewhat prepared for a bad year. You just hope it doesn't get worse than you think it will," she says.

Sackett and the Moes say Grafton businesses are optimistic that the new crop season will bring better times.


"You have your ups and down. We've been in a down time. But it'll bounce back," Sackett says.

There are questions of how soon the bounce-back will occur, however.

Potential farm profitability this year is limited by poor crop prices and high expenses, the latter partly caused by landlords who won't lower rental rates despite tough times in ag, says Ben Suda, a Grafton farmer. He's also proprietor of Dakota Firearms Supply in Grafton and past president of the Grafton Chamber of Commerce.

Until the ag economy improves, farm families - some more than others - will be limited on spending on living expenses such as food, clothing, furniture and entertainment.

"There's going to be some changes in how some of these families live, lifestyle changes," Brummond says.

Family living expenses can be a sensitive topic that farm families are reluctant to think or talk about, says Andrew Swenson, NDSU Extension farm management specialist.

But when farm incomes drop, farm families need to examine spending less on living expenses, with trips, entertainment and "household updates" among the possible cutbacks, he says.

Swenson also notes that reducing direct farming expenses may not be wise, especially if the potential cuts involve products such as fertilizer and chemicals that can boost crop yields.


Denise Moe says she understands furniture is "an extra" that farm families may spend less on when times are tough economically. Reflecting that, furniture sales at her family's business dropped about 15 percent from 2015 to 2016.

But farm-town merchants recognize that toughing out poor times is part of their job description, she says.

Lean years "make you appreciate the good times more," Moe says. "And we know the good times will come back."

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