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  • From: "Tradingpost" <tradingpost@lobo.net>
  • To: livingontheland@lists.ibiblio.org
  • Subject: [Livingontheland] U.S. Farmers See Their Income Plunge 38% As Recession Grips Agriculture
  • Date: Fri, 28 Aug 2009 21:48:53 -0600


U.S. Farmers See Their Income Plunge 38% As Recession Grips Agriculture
http://www.huffingtonpost.com/2009/08/28/us-farmers-see-their-inco_n_271019.html
First Posted: 08-28-09 08:05 AM | Updated: 08-28-09 01:05 PM

After some of the most profitable years in a generation, American farmers
have seen their incomes dwindle as the recession begins to weigh on food
prices. The Wall Street Journal reports this morning on the sad state of the
heartland, which had been largely insulated from the downturn in 2007 and
2008.

How bad is the drop in farmer's incomes? The Agriculture Department reports
that U.S. farm profits will dip 38 percent this year alone. (For some
context, the S&P 500 index is up just over 10 percent this year.) Here's the
WSJ:

"The Agriculture Department said it expects net farm income -- a widely
followed measure of profitability -- to drop to $54 billion in 2009, down
$33.2 billion from last year's estimated net farm income of $87.2 billion,
which was nearly a record high. The drop in farm prices is likely to lead to
a slower increase in food costs for American consumers, economists say."


As food prices decline, even staple-producing dairy farmers are hemorrhaging
money. Bloomberg picks up the story:

"'I haven't talked to a dairy farmer who isn't losing money,' said Jim
Goodman, an organic-milk producer who farms 500 acres about 70 miles
northwest of Madison, Wisconsin.

Farms with at least 1,000 cows are losing $30,000 to $40,000 a month,
Goodman said. Revenue from dairy products may fall 34 percent this year to
$23 billion, while the value of meat animals will drop 11 percent, according
to the USDA. "


As the WSJ points out land values are still dropping, which has reduced
farmers' chief source of collateral and made it difficult to borrow. )This is
assuming, of course, that banks are actually lending at normal rates.) More
from the WSJ:

"Gene Gourley, who raises 60,000 hogs every year on his farm in Webster
City, Iowa, is losing as much as $30 on each hog he sells. He said Thursday
that he is rethinking plans to buy a trailer for hauling feed to his
livestock. 'With hogs losing so much money, you're basically burning up
anything you could have saved," said Mr. Gourley. "You just don't have the
equity to go buy new upgrades.'"





  • [Livingontheland] U.S. Farmers See Their Income Plunge 38% As Recession Grips Agriculture, Tradingpost, 08/28/2009

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