Many large and small commercial farm operators in the U.S. and worldwide are struggling to make ends meet currently. The 2017 farming year looks like it could be a “turn-around” year, but there will be casualties among some overly indebted producers who want to continue farming and will have to cease or restructure significantly in order to keep a foot in agricultural production.
This year, and what could follow, offer hope for most who have carefully managed their expenses and incomes through various protections like insurance, modest purchases of new equipment and facilities, and marketing contracts that guarantee a break-even outcome or profit. The upcoming crop year is still one that requires plenty of careful adjustments and planning.
Importantly, the willingness of farm operators to acquire useful information and to undertake hard sacrifices is motivating these food producers to keep trying to succeed. Whether conventional producers of major commodities like grains, oilseeds, meat, milk and eggs, or growers of organic alternatives to these commodities and specialized items, the dedication of all farmers to continue their agrarian pursuits is a common denominator.
I recently undertook speaking events in North Carolina where I conferred with farmers and migrant workers and with farmers in Wisconsin and South Dakota. I also communicated by email or phone calls with numerous farmers and ranchers, agricultural lenders, Extension specialists and veterinarians in Kansas, Iowa, Colorado, New York, Minnesota, California and Washington, for I receive 3-20 emails, phone calls or letters every week.
Everyone I visited with in person or by phone or email gave similar reports: “Farming is going through an adjustment phase.” Almost all were expecting improved prospects in 2017 and thereafter; their biggest “unknown” was what President Trump and Congress would undertake administratively that could affect them.
I decided to draw what I could from this varied group about the nearby future of farming and the global economy. I agreed to protect their anonymity.
Here are their opinions, which I summarized, about the nearby future of agriculture:
- First and foremost, everyone proudly said U.S. producers are the most efficient in the world. An academician and a professional lender noted that some farmers in Canada, parts of Europe and South America can match the capacity of American producers, but American farmers overall are the most tenacious and innovative in most agricultural arenas.
- Worldwide surpluses of grains and dairy items will dwindle as producers in some less efficient agricultural nations, like certain African, Asian, Eastern European, and South American countries, and especially those that do not have adequate transportation systems, will have to scale back. Some of these countries could also face larger economic and political destabilization in a changing political environment.
- The Agricultural Extension specialists and two experienced farmers said recessions in farm income typically bottomed out in their third year (This is the third year of our current ag-recession). Depressions are longer, but most signs, they said, point to modifications in worldwide food production, making farming in the nearby future more profitable.
- Weather conditions are an unpredictable factor, so it makes sense to take insurance protections. It seems West Coast U.S. farmers will have plenty of water available in their subsoil and/or from irrigation sources. Vintners worry about damage to their vineyards from excessive runoff and having so much underground water as to reduce the quality of this year’s production.
- Some states that depend significantly on agriculture to fuel their economies have had to reduce their state budgets lately. How their state governments deal with income shortages could impact agricultural producers. Farm owners don’t want to pay higher property taxes for costs that are shifted to counties and cities because their state governments can’t supplement them like usual.
- Farm producers worry about repairs of infrastructure, construction of new roads, bridges, and facilities, and other needs that have been put off. Many states, counties and localities reliant on agriculture need an economic boost.
- There is concern that costs for food in grocery stores are higher than consumers feel they should be. That’s partly because only a few wholesalers manage the supply of certain commodities such as milk and most meats. Alternative sources of these foods are becoming popular because they may be cheaper and are considered healthier, such as farmer markets, CSAs and growing food ourselves.
- When asked, everyone said the farmers who are in agriculture because it is more a way of life than a business are “in it for the long haul.” Their hearts as well as their brains are guiding their choices; they are learning from experiments, mistakes and successes. They view farming as a true calling to serve others as well as a living for their families.
There is little more I can say. My recent experiences educated me and that is why I am sharing them.
It will be interesting to see what develops this year. Let me know what you think.