EVERYONE IS CONCERNED ABOUT FARM PROFITABILITY
A sharp decline in commodity prices has reduced farm income and tightened farm cash flows. But that’s no surprise for those of you living it.
Still, a new report from CoBank indicates accounts receivable at farm supply co-ops and other ag retailers are growing. This is a result of the highest debt to asset ratios in the farming sector since 1983.
“The drop in farm income over the past three years is the steepest decrease since the Depression,” says Tanner Ehmke, CoBank senior economist covering the grains, oilseeds and ethanol, and the farm supply sectors. “Producer incomes have fallen more than 50 percent from 2013 to today and their debt-to-income ratio is on the rise.”
Ehmke was quoted in CoBank’s release on the report which can be found here or you can watch this video summary below.
Agriculture Secretary Tom Vilsack is also concerned about farm profitability based on the Farm income and Financial forecasts for 2015 and 2016, released yesterday by the USDA’s Economic Research Service.
“The estimates today also showed that debt to asset and debt to equity ratios – two key indicators of the farm economy’s health – continue to be near all-time lows,” he said in his statement.
Vilsack and the USDA believe higher off-farm earnings will stabilize losses due to low commodity prices.
IL Corn understands the pressure farmers are facing with under $2.90 corn prices this week. We continue to push the administration for better infrastructure to make our export sales more globally competitive, new trade agreements that will open additional markets for corn and corn co-products, infrastructure and policies that will open ethanol markets, and less restrictive regulations that simply make the cost of farming higher, often without any additional benefit.
Market opportunities and increased demand WILL buoy corn prices – and you have an opportunity to help.
Click here to send comments to your legislator on the importance of new trade agreements to your farm and your commodity prices!
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