Farmers' Futures

Farmers' Futures

David Sparks Ph.D.
David Sparks Ph.D.
Agricultural economist with DTN/ The Progressive Farmer, Katie Micik has recently discussed a variety of reasons why farmers are experiencing tough times. “Look in your crystal ball and tell me is this going to result in a lot of farmers quitting? Everyone is looking at the 1980s and trying to do a comparison. The big thing that sticks out is that interest rates are very different. Also going into this down cycle, a lot of farmers aren't nearly as leveraged and don’t have the kind of debt farmers did in the 1980s. Farmers over the past years have been able to build up some working capital. Some of the farm credit and bankers that I have spoken with recently have said that working capital can last through this year. It's next year when that cash flow could get really tight, especially for people who have the exceptionally high input costs and have that higher cost of production. For farmers who work really diligently to keep their costs of production under control, they probably have a decent chance of making it through this down cycle. A lot of economists are calling for lower prices through the mid-2017's unless there is some type of a major global weather event that could change the direction of the commodity market. Yes mother nature can be cynical. Yes, as we are seeing in Illinois, Ohio and parts of the Mississippi River Valley, just really strange for this time of year.
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