How the Crop Really Looks
If you’ve driven a country road lately, you’ve seen the tasseled corn and big, lush soybean plants. This has been an ideal growing season and many fields look ahead of schedule. As it appears now, yields will likely be above average, and it will be a banner year for farmers.
That’s how things appear.
The flip side to this picture is the current situation regarding tariffs and China. While this is not a political discussion, it is my perception of how American farmers are affected by circumstances on the other side of the globe.
The current tariffs being levied against China are meant to send a message. It’s been no secret during my tenure as a farmer that China doesn’t play fair when it comes to trade. Whether it’s intellectual property theft, currency manipulation or any number of other tactics, their actions reverberate across our economy.
Soybean and corn prices are currently taking a hit in light of these tariffs, as are other ag products across the country. In Indiana, the majority of our crop production is in corn and soybeans. While I wouldn’t call the situation dire, it is worrisome, and many farmers will be facing a very real financial challenge come harvest.
I recently attended a meeting hosted by the Indiana soybean and corn associations. The featured speaker was a former US trade representative, who discussed the current trade war climate. While there doesn’t seem to be a clear plan on how to fix the problem, it does appear that trade agreement negotiations should be actively pursued on a continual basis in order to prevent an eventual crisis for any particular ag product.
The other factor is that things could change next week, but it takes time to recover. For instance, farm prices tanked in the ‘80s on the heels of the Russian grain embargo and many farmers never recovered.
For us as farmers, it’s difficult to predict what will happen once it’s time to harvest. Will prices rebound? Should we sell right away, or will it pay to store grain and wait for a better price? Many farmers can’t store grain while others will need cash in order to cover the expenses of operation, creating more strain on their bottom line.
For us, our gross income will be greatly affected. While the last four years have been tough in terms of stagnant earnings, this is the first year in a long time where it won’t be profitable.
Are there options? Unfortunately, we are mid-way through the growing season. Had these events happened over the winter, farmers may have had the opportunity to explore other products not as adversely affected by the market drop.
Family farmers now make up less than two percent of the population in America, but they feed, clothe and supply us with every day products. A high percentage of production jobs in the US are related to ag: food processing and manufacturing for everything from dairy to nuts.
This is not to say that it is all gloom and doom. We don’t know the outcome of these tariffs, but many farmers are in agreement that action has been needed for years. It’s just difficult to be squeezed as part of the process. However, I have a high level of trust in the current leadership at the USDA. I’m confident there is a lot of activity and effort going on that we just don’t see right now.
The bottom line is, this is agriculture. There’s always risk; adverse weather, disease or the whims of Wall Street. We’ll hunker down, tighten our belts and ride it out. And hopefully try again next year.