U.S. Farmers See Their Income Plunge 38% As Recession Grips Agriculture

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.'"

Read the WSJ's story here -- or check out Bloomberg's piece here.

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Comments

[dadw5boys]

Farmers turn the tables on Monsanto -- do not buy their seed and suie them to get their gene off your land !!!!!
Make a a million just to drop the lawsuit. They already lost this one in Canada.

[Aristofaness]

The fed need to borrow the cheap money directly to bussinesses and consumers before is tooooo late, the banks are looking for profit and the economy in main street is suffering, If the banks increase fees and rates the economy of most of consumers is going to colapse, They need to understand that IS NOT time to be looking for marvelous profits, IT'S TIME FOR A RATIONAL CAPITALISM AND TRY TO HELP CONSUMERS TO SURVIVE, NOT TO TERMINATE THEM.
50% OF THE SOLUTION TO THE ECONOMY IS BORROW TO CONSUMERS WITH ZERO INTEREST.
FED BERNANKE AND CONGRESS;
OPEN YOUR EYES!!!!!
DO YOUR JOB!!!!!, HELP THE ECONOMY!!!!
PROTECT CONSUMERS AND IN THIS WAY YOU CAN SAVE THE ECONOMY!!!!!
BORROW THEM THE CHEAP MONEY!!!!
BEFORE IS TOOOO LATE
YOU CAN SAVE THE MOTOR OF THE ECONOMY (THE CONSUMER) IN THIS WAY

[joebhed]

What's the matter with these farmers?
Why didn't they get into banking?
They would have been bailed out with free money, and then promised years more of almost- free money.

This is about the soil.
The soil on the land that produces our food.
It's about to fall into the hands of the Agricorporations and their financiers because the farmers can't pay their bills, to either their suppliers or their bankers.

I'll say this once.
This is NOT the way the money system would be working if we were in control of our money system.

I am NOT saying, if it WAS our money system.
It IS our money system.
I'm saying, if we CONTROLLED OUR MONEY SYSTEM.

Just like this land is your land, this money system is your money system.
The Money System Common.

[americaforme]

Hey, have you guys checked lately, the rich are still getting richer, and many so called socialist, are linning their pockets too. We the sheepole are so busy watching the right and the left, the bank theives are running off with the family cow. Have a good day.

[isis]

Maybe they need to grow more food that people eat instead of all that corn.

[Terribleblodge]

"After some of the most profitable years in a generation,"

Actually I think if you look into it a bit more you'll see that the years 1977 - 1981 were the "most profitable years" for most farmers. They may have had the highest gross during the anti-American Bush years but at the same time they were being raped by Big Ag so that their actual net AND the value of that net profit were really less then the late 70's.

[CaptainVideo]

The great majority of government aid to farmers goes to large agribusinesses. The Obama adminstration actually tried to restrict this, but congress refused to go along. Both Republican and Democratic representatives are to blame for this. They know on which side their bread is buttered.

[Stephen Wahls]

Anybody here own a farm? The government subsidizes production. Food is a strategic weapon so it is necessary to insure its safety. When I was young a farm could be operated with 80 acres. Today 1000 acres minimum. A farmer in the fifties worked 15 hrs per day almost 365 days a year. Today they work 10 hrs a week physical and 20 hrs a week tracking paperwork for the subsidies. That's why many children don't follow. Not to mention the $5000.00 / acre land. Another thing that hurts family farms is the fact that the government keeps meddling with the tax laws. You see when you take the time to acquire the land and in most cases it requires a lifetime (30 years) and when you’re ready to pass it on to your heirs. They change the capital gains laws so you can't pass it on like you have planned and worked your whole life for. You see 1000 acres @ $5000.00 =5,000,000.00. Purchased 40 years before for $1800.00. Now if you consider 2% inflation and interest on the loans the $5000.00 dollars isn't even even and you get it all taxed away from you. Our kids are smart enough to know they don't want to waste their lives in this bait and switch scheme.

[Stephen Wahls]

This year we will make 175 bushel of corn and it will pay for our efforts-negative15% per bushel. The seed company got paid the fertilizer company got paid the insurance company the bank the oil company and equipment company after all those get paid and if the weather cooperates the farmer will get paid if he brings it in. He’ll get one paycheck this year (ya got to budget!!) sounds like fun right?

[Stephen Wahls]

The government limits the payments to farms of a certain size or smaller. And they pay to practice conservation. And pay to lay aside acres for wildlife. Corporate farms might be good for american farms by insulating operators from liability. Liability is where the money is. Just like malpractice insurance. These things are like forced participation in the Loto lots a money gets sacked away in there and nothing good comes of it for those financing it even if it is used.

[spinns17]

maybe they will stop voteing for repugs now.

[Terribleblodge]

I doubt many farmers did. Not any of the ones who could tell the difference between profit and lose anyway.

[masher]

Great! So the landless American peasants can goin the landless Mexican peasants in working on Obama's corporate run farms. This of course after Obama grants amnesty to the people here illegally.

This fits in perfectly with the Obama pattern of bailing out the rich no matter what they do and making sure the middle class get no breaks from federal interference. Heck, only Obama would keep H-1B work visas being issued during the nations worst recession. Yes, Obama is right now issuing work visas(h-1b look it up) to foreigners so they can replace Americans in America.

[dadw5boys]

Maybe instead of complaining you should go down the local high school and tell them U.S. Students need more and longer math and science classes. Because American Businesses need people with mathmatic skills more today than anyother time in history and we are in competition with all the industrulzed countires for these talentsed people.

Sports programs take up more time than any math class. How can that be 1 hour for excerise and 40 min for a math class ? Only one math class a day.

In India and China there are no sports programs in school ! They have 1 1/2 hour to 2 hour long math and science classes. They go to school all day returning home around 5pm. and they go to school year round, In Japan the kids even cook their own meals in school !!!!!

[lj9283]

Guess you don't know how H-1B Visa work, do you sparky?

There is no fiscal advantage to hiring a H-1B Visa worker over an American worker (look it up sparky).

Your post is so filled with lies and statements based in ignorance, that you could be the poster child for employeers who look to increase the number of H-1B Visas.

[spinns17]

psssst ,you dont know what you are talking about.

[mick7191]

Posting at 2:25 am? Try again when you sober up.

[CaptainVideo]

"Obama's corporate run farms"

So these farms only came into existence since Obama became President.

[Rule Of Law]

Did anyone here really think that the banks would be content with taking only our homes?

[masher]

Obama is from Chicago so the commodity traders there are his main circle of friends. I think Wall Street was his way of saying to the east coast elite "yes, I will serve your interests too".

Promoting corporate ag is something Obama is right at home with.

For the west coast elite Obama is on board with H-1B work visas and all the other work visa programs.

Its more and more clear that this is Bush's third term.

[spinns17]

man where do you people get that stuff you smoke.

[dadw5boys]

Where they got you is if you File for Bankruptize !

If you file you are forced to turn Unsecured debt into secured debt !

The trick is not to play their game. Let them go get a judgement, actually encrouage them too. Say tjhere is no money take it to court take all this cheap crap maybe you can get a few dollars for it.
Your wasting your time calling there is no money hell I can not even buy toliet paper. lol

See a judge can declare you bankrupt but a judge can not force you to file for bankruptize. The laws keep them from taking your home so let them have the rest. Buy used rental cars register to your mom or bother. Forkt them ! Them have been forking Americans too long.

[Artos]

The point with Monsanto is sort of moot fellas. Monsanto has been making it a practice to develop seeds that will only grow one crop but whose produce are sterile. This means that eventually they will corner the market on all grown crops. You don't buy from them, you don't eat. It is as sinister a plan as you could ever dream up.

[dadw5boys]

THE MONSTANTO GENE IS SHOWING UP IN HUMAN DNA !!!!!!!

Is your Body RoundUp ready ? If so then Monsanto Owns your body !

I hope I get the Monsanto gene I am going to send them bills for this bodys up keep and food!!!!!

$ 3,000 a month should cover it !

[Palemoon]

And it's pretty clear to me that one thing economics just don't get in their concrete filled skulls... how high can prices go before it all collapses? I've been saying this for years and last years meltdown proved some vindication for it. You can't build an economy on false value, false profits and false money and expect it to stay standing.

Since I've owned a Monte Carlo SS in the past, I used that as an example of what I mean. 1970 Monte Carlo SS built like a steel tank, 454 high performance monster engine, around $3500. The 1985 Monte Carlo SS I bought, 305 smog choked engine that couldn't pass a Honda Civic, mostly made out of fiberglass, around $11,500. 2006 Monte Carlo SS, V-6 engine, economy car, mostly plastic with some fiberglass, around $26,000.

Now then, math wizards, tell me how many "times" of an increase that was in just 26 years? How much % increase over 26 years.

The point I'm getting at. How high can we keep driving prices, and profits, before all of the money that can be spent, has already been spent? Or is money just what I think it is, created out of sheer greed with which to brag about and otherwise serves no purpose at all?

[JacklynD]

My real question is why in heavens name did you buy the third Monte Carlo? Isn't like reelecting George Bush. At some point you should know better.

[Palemoon]

I only owned a 1985 model, lol. But I was using it as a way to point out how something increases over time in the marketplace. Largely falsely, lol.

I used that choice cause I know what I paid for the car, and the other 2 same model comparisons were easy to find.

[Palemoon]

My math was wrong too, I guess that should have stated the difference over the course of 36 years, not 26 years, oopsy.

[Palemoon]

"Rain On The Scarecrow"
http://www.youtube.com/watch?v=d9Iy2Jw4DVk

That's a sobering reminder from the middle 1980's when Reaganomics was just starting the downward slide of Americana. The reason the politicians were partying like it was 1999, is because they didn't think the world would last that long. So it was all about ME, ME, ME and fleecing every penny one could get out of something with absolutely no forethought about the future. Borrow/spend, borrow/spend, that's what they did and is what they encouraged everyone else to do.

I remember first moving to this area of Georgia in the 1980's from my native Florida and not even having to leave town to see a nearby farm somewhere in the distance. But now due to farming being an unprofitable venture, combined with imports, outsourcing and a lack of later generations wanting to do it, I now have to drive 30 minutes to see nearest farm. Most locals sold out and real estate developers moved in. Gone are the hundreds of acres of peach farms that bordered one side of town where one could go every spring and be overcome by the sight and smell of all of those peace blossoms. Now there's a new mall sitting there, with another strip mall of department stores across the highway. Gone are the peach farms.

[Artos]

Don't worry, because the way things are going this is just what the Corporation Farms are waiting for, the chance to lessen their competition. Soon as in everything else we have been witnesses to, they, (The Corporations) will control not only our Food supply, but our Shelter and unless we are willing to go naked our Cloths as well. They will bring us to the actual enactment of "Soylent Green" in real life.

[Terribleblodge]

Corporate Factory Farms is absolutely what big business is pushing for. Take a look at how many small local family farms go out of business every time a Republican sneaks into the White House.

[MadHeart]

All these generalizations about farmers are nothing but hot air. Farmers grow for the demands of consumers, although everything doesn't end up on your plate. If you frequent fast food joints, a lot ends up there and in sit-down restaurants, even though much food is imported. Did you know that the potatoes for McDonald's and Wendy's fries come from Simplot Corp. and are grown in Manitoba? And even though many people are starting their own gardens, most don't, and unless you have acreage, you can't grow many of the products you need, like grains, and for many people, gardens are not practical.

The county I live in (NC) used to consist of nothing but farms, dairy and otherwise, but the children of those farmers didn't want the hard life after several generations. Instead, the heirs have sold off the land to developers. We still have some farmers, but they're generally small landholders, not hundreds of acres, not rich, and supply the farmers' markets here. And who do you think will grow food you can buy locally, keep cows for milk, chickens for eggs and other products, if not farmers? If you really want local food, you need to support local farming.

[Artos]

What you have pointed out about the offspring of farmers, who don't want to take up farming is true and yes they do sell these off to developers. But the fault for allowing this is our governments. These people spend a lot of money keeping tabs and creating stats on everything. Every year they put out numbers about how our food supply may dwindle and famine could be a possibility. They also make it a practice to enable laws that are meant to avert problems that could affect the mass of our society and therefore its security and well being. If starvation doesn't fall under that guideline I don't know what does. Some Congressmen/women should have long ago created legislation that would have protected our farms. If the offspring of farmers won't take it up then that land should be maintained as farmland and sold to someone who will do the job, other than the Corporations. I'm sure there are hundreds of Amish, Mennonite and Quaker farmers who would do the job, since they prefer the agrarian lifestyle. Right now many Amish are in fact looking for more land to farm. I saw an article in the newspaper that spoke of it. Our futures will be pretty grim if we end up with famines.

[sparky73]

we should not allow foriegn grown food to imported in the United States. Everything sold should be locally grown

[who38]

Of course, that will shut down our exports as well. Not a good idea.