March 02, 2017 06:38 PM
As farmers apply for operating loans, agricultural economists anticipate a sobering spring for those falling deeper into debt.
Since commodity prices fell dramatically four years ago, many farmers have been burning through their capital. Ryan Buck, a corn and soybean grower in Goodhue, said breaking even has unfortunately become the new bar for success.
"You're probably losing fifty bucks an acre," Buck said. "Sometimes even more, depending on what your cost of production is."
Even on the heels of a good harvest, Buck said farmers young and old are struggling to cut costs, maintain yields and stay afloat.
"The hardest part was doing the field work, but now the hardest part is pushing the numbers and making sure everything works," Buck said. "It's joyful just to get in the tractor and away from the desk."
Dale Nordquist, an agricultural economist at the University of Minnesota Extension, said the farmers struggling the most are the ones who invested in new equipment and land before commodity prices dropped in 2013.
After a drought in the south drove up prices in 2012, Minnesota's median net farm income fell from $189,679 to just $27,478 in 2015, according to the latest available data.
"That's what they have to feed their family with and grow their business," Nordquist said. "There's really been some financial stress."
Before lenders foreclose on farmers, they must offer mediation through the university Extension. Since commodity prices plummeted in 2013, the number of mediation notices has nearly doubled from 1,612 to 3,031 last year. Nordquist now expects lenders to start turning away more farmers seeking operating loans.
Said Nordquist: "Especially in the next couple months, we'll hear more and more of that, where farmers did not get operating credit."
Updated: March 02, 2017 06:38 PM
Created: March 02, 2017 05:16 PM
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