Farmers forced to quit as income dives
Recent trade disputes worsen uncertainty over commodity prices
MILWAUKEE – Farm income this year could be the lowest since 2006, a reflection of low commodity prices, exporting issues and in some places, lousy weather.
Nationwide, net farm income has fallen by more than half since 2013, and it’s expected to drop another 6.7% this year — to the lowest level since 2006, according to the Department of Agriculture.
Farmers are facing unrivaled income volatility, coming off high commodity prices five years ago, the USDA says.
Now, “the prices that farmers have been receiving for their products aren’t paying the bills, and too many people are being forced to give up farming,” said Roger Johnson, president of the National Farmers Union.
For every dollar consumers spend on food, the farmer receives just 14.8 cents — the lowest “farm share” since the USDA began reporting the figures in
1993, according to Johnson.
In April, beef producers received just
22 cents of the retail food dollar compared with 44 cents four years earlier, NFU figures showed. Dairy farmers received 30 cents, down from 51 cents in April 2014.
Wheat farmers average just 12 cents on a loaf of bread that retails for $3.49.
These figures “strike a chord with family farmers and ranchers who are dealing with the sharpest decline in net farm income since the Great Depression,” Johnson said.
“Most consumers do not fully realize the volatility and risk associated with farming or the economic despair many family farmers are enduring,” he added. “However, when you consider that what you’re paying at the grocery store continues to drop, and you see the farmers’ share continue to drop, you can imagine that it’s hard to earn a decent living in agriculture right now.”
‘Playing in the mud’
Low prices aren’t the only problem. Some farmers have seen a tough break when it comes to the weather, such as the flooding that has socked parts of Wisconsin.
“We are playing in the mud,” said Ross Bishop, a beef cattle and crops farmer in Washington County, Wis. “I have two-thirds of my corn planted, but probably 5 acres of that is under water.”
Bishop said he’s losing about $200 for every steer he raises for slaughter. His prices have fallen because there’s a glut of animals on the market, even though consumer demand for beef re- mains strong.
Many farms, not prepared for the sharp and prolonged downturn, have folded.
“I knew this was coming, so I haven’t bought anything new, and I don’t have a lot of debt,” Bishop said.
Some farm economists are predicting a recovery in commodity prices next year or in 2020, especially if foreign trade issues are settled and global markets become more predictable.
But a turnaround also depends on the weather and the growing season in the U.S. and other countries that produce massive amounts of corn, soybeans, other crops, livestock and dairy products.
“Farmers have no way of influencing prices. Their only way of trying to increase their income is to produce more,” Johnson said.
Exports hang in the balance
Trade disputes have created uncertainty, with China canceling U.S. soybean shipments and Mexico turning to South America for soybeans over concerns about the North American Free Trade Agreement.
“The trade tit-for-tat could ultimately end up shutting the door on millions of pounds of pork, over 3,000 tons of beef and $14 billion of soybeans meant to be sold around the world,” Kevin Skunes, president of the Corn Board of the National Corn Growers Association, wrote in a column.
“The expanded list of tariffs on exports is making America’s farmers the first casualties of the trade war between the U.S. and China. If the U.S. withdraws from NAFTA, there will be severe consequences for America’s farmers, and for our regional, national and global economies,” Skunes wrote.
It’s hard to say what’s “normal” in agriculture, since markets and prices are always changing. Still, many farmers have been pummeled by back-toback years of fallen profits.
It never feels “normal” when you are stuck in a low period, said Jim Holte, president of Wisconsin Farm Bureau Federation.