Yesterday’s “opportunity to share” while sending around a news article on Midwest farm bankruptcies is today’s news article. Long time Grand Island Independent journalist Robert Pore read my comments yesterday and gave me a call. Thanks to him for his interest.
The length of the current 5 year financial downturn in ag is more belt tightening than many farm operations can handle. The conversations over kitchen tables between now and spring planting for many farm and ranch families will be tough ones. Those kitchen table discussions will be tied the ones at the banker’s desk.
All the best,
John K. Hansen, President
Nebraska Farmers Union
1305 Plum Street, Lincoln, NE 68502
402-476-8815 Office 402-476-8859 Fax
402-476-8608 Home 402-580-8815 Cell
Stressed farmers seek hotline services in near-record numbers
Nebraska farmers are putting the finishing touches to a record corn and soybean crop. But with poor farm income, phone calls to the Nebraska Rural Response Hotline from first-time, financially distressed farmers and ranchers continues at record or near-record levels, said John Hansen, president of the Nebraska Farmers Union.
According to the USDA’s National Agricultural Statistics Service, Nebraska corn harvested was 94 percent, near 96 last year and 97 for the five-year average. Winter wheat condition was rated 2 percent very poor, 7 poor, 25 fair, 46 good, and 20 excellent. Sorghum harvested was 95 percent, equal to last year, and near 98 average. Pasture and range conditions rated 2 percent very poor, 3 poor, 22 fair, 66 good, and 7 excellent.
But with so much abundance from record crops, America’s farm community is going through its worst crisis since the mid-1980s, Hansen said.
That is why, he said, phone calls to the Nebraska Rural Response Hotline continue.
Hansen said a common theme from those callers is, “They can’t pay their bills.”
“They are under financial stress,” he said.
Hansen quoted an ag lender in Nebraska saying that 60 percent of the state’s farmers are able to service their debt load or have no debt load. He said in many cases, “They are self-financed, so they are not borrowing money for operating expenses.”
For those farmers, he said their land costs are “insurance and taxes.”
“They can survive at these prices, but they are losing equity,” Hansen said.
Thirty percent of the farmers, Hansen said, are “kinda on the bubble.”
“In most cases, they have already tried to sell off equipment, reduce debt, try to bring in some more off-farm income,” he said. “But they are going to be needing to be doing more of that if their loan is going to get renewed.”
For the remaining 10 percent, Hansen said, “They are in so deep that there is not much hope for them. They don’t have enough equity or liquidity.”
He said Nebraska’s hotline is the “longest continually serving hotline in the nation and has been meeting the needs of rural families since 1984.”
Hansen said the hotline is administered by Interchurch Ministries; Nebraska Legal Aid provides legal assistance; the Nebraska Department of Agriculture offers mediation and farm bookkeeping services; and the Nebraska Department of Health and Human Services funds the mental health vouchers.
According to a recent Associated Press story, the number of farms filing for bankruptcy is increasing across the Upper Midwest. According to a new analysis from the Federal Reserve Bank of Minneapolis, the story said “the trend comes on the heels of low prices for corn, soybeans, milk and beef.”
While trade problems have been associated as one of the reasons for low prices, one banker was quoted saying the “underlying problem began before the trade issues, with farmers being too efficient for their financial good and demand not keeping pace with the production.”
This year’s harvest is an example of what the banker was referring to when it comes to production.
The USDA, based on Nov. 1 conditions, reported Nebraska’s 2018 corn crop is forecast at 1.8 billion bushels, up 7 percent from last year’s production. Yield is forecast at 195 bushels per acre, up 14 bushels from last year. Both yield and production will be record highs if realized.
Soybean production is forecast at 345 million bushels, up 6 percent from last year. Yield is forecast at 61 bushels per acre, up 3.5 bushels from last year. Both yield and production are record highs if realized.
“He (the banker) blames the victim, not the federal farm and trade policies which are now one and the same policy, for the economic plight of farmers across the country,” Hansen said. “After all, America’s farmers have done what their government has asked them to do, and for that, they are losing billions of dollars of equity and cash, and in most cases, working for nothing.”
Hansen said the Trump administration and Congress have done little to “appropriately respond to the worst farm crisis since the mid-1980s.”
For example, Congress has yet to pass a new farm bill.
“For the most part, they seldom admit there is a crisis,” Hansen said.
He said the first step toward problem-solving is “the recognition of the problem itself.”
“Net farm income for 2018 will be half of what it was five years ago,” Hansen said.
Hansen gave an example from his own experience as a farmer.
“The cash market price of corn at my local terminal elevator in Newman Grove is $3.30 per bushel today, the same price I sold my corn for when I started farming 45 years ago in 1973,” he said.
Hansen said the rate of inflation is 5.5 times as much now than it was in 1973.
“1973 income does not pay 2018 cost of living or costs of ag production bills,” he said.
He said National Farmers Union used USDA data to report that the farmer’s share of the food dollar this Thanksgiving was 11 cents, an all-time low.
“Increased volume times a loss still equals a loss,” Hansen said.
Hansen said that folks can call the hotline at 800-464-0258.
“If you know of someone in rural Nebraska in need of everything from food assistance to suicide counseling, have them call that number,” Hansen said.