Data from the University of Nebraska Extension Service is showing losses for grain farmers. Extension Educator Robert Tigner says the lower grain prices, along with static input costs are hitting balance sheets.
“This 2015 crop is well below the peak revenue, about half of what it was at the peak in 2012 and ’13,” Tigner says. “Costs though haven’t changed much at all since then, in fact, they’ve held up quite strongly. Fertilizer, seed costs and a little bit of pesticide costs reduction but land rent has not declined either.”
Tigner says he’s calculated break-even levels for the major crops grown in Nebraska, and almost everyone is in the red.
“We expect somewhere around $4.25 or $4.50 for irrigated production in Nebraska, that’s about a 215 bushel yield and that’s well above the cost of production,” Tigner says. “Sorghum actually comes very close to breaking even. Wheat is close, about $6 an acre below the cost of production and soybeans are a little bit less than that.”
Tigner says the hit to farm income this year won’t be anything like the farm crisis in the 1980s, largely because producers aren’t as heavily leveraged and can weather the storm.
“We were much overextended in our lending practices in the ’80s,” he says. “That was a lending-driven or a financial exposure-driven crisis. Right now, we don’t have that kind of exposure for most of these farmers. The vast majority of them have very strong financial balance sheets.”
Plus, he says many producers are diversified and made money on livestock in the last few years.
By Jerry Oster, WNAX, Yankton