55 Years And Counting From The Tractor Seat

By bill whitman 

 As everyone involved with agriculture knows, grain farming is going through a difficult time. Costs that we were able to absorb in past years are no longer tenable.

Most readers know that I watch my share of FarmTube videos. I find looking at comments to be enlightening as to how 99 percent of the population thinks about what we do for a living. I see it over and over, “Why would anyone do that?” It’s a little worn out but the phrase, “I don’t need farmers in my neighborhood, I get my groceries at Kroger.” Unfortunately, there is a certain reality to this thinking.

Surviving this year is fraught with challenges that will test the mettle of every farmer in the country. Anytime you’re losing money it’s hard, but when you have the amount of credit needed to farm these days, the pressure pushes the limits. I predict that we will see a rise in suicide as the result of another year of increasing our debt with no relief in sight. (I will be talking about mental health in a future article).

So let me back up a bit. I recently examined Purdue University’s Agricultural Economics Report. Break even for corn on average ground is $5.27 a bushel for 2025. Break even on average ground for soybeans is $12.30 for 2025. Last week corn almost made $5 a bushel before falling to the mid $4.80’s. Soybeans are struggling to hold over $10 per bushel. Now look at inputs. Do you see any significant drop in seed prices, fertilizer or herbicide? How about fuel, oil, repair parts? How about equipment prices and credit? A close look at Purdue’s report notes that credit markets are tightening with a pessimistic outlook going forward. The demand for more operating money, the result of lower grain prices, makes the credit costs rise. Now it is over 8 percent, and I suspect it will go higher as creditors look at the numbers and see that even the USDA is predicting a loss of one in four farms this year. 

So where is the light at the end of the tunnel? Again, I am reminded of the late ’70s and early ’80s when we saw the family farm numbers shrink significantly. Young farmers were forced to find ancillary forms of income to offset the losses. Older farmers further encumbered the equity in their farms until creditors discounted collateral to embarrassing levels. “There’s nothing new under the sun” is an adage that seems to be proven again. 

I was recently talking with Dean Ford, a large farmer in Dupont, Ind., who also has had a successful used farm equipment business for over 40 years. Dean is like me, an older man with a passion for agriculture. He shared his belief that integrity in doing business was what he credits with farms and businesses standing at the end of the economic fights of the past and the one we’re engaged in. Frankly, I like doing business with Dean as he has built his business based on the principle of integrity first, so I pay attention when he talks, I learn so much.  As I mentioned in a previous article, to stay profitable farming, you must evolve with the economy and be willing to alter practices to take advantage of every opportunity.

One of the things that I see in which we can offset some of our losses is to mitigate risk by looking at using our assets to develop new revenue. A young farmer I’ve been watching down around Washington, Ind., has been adding cattle to his grain operation. Not a lot but enough that it will provide enough cash flow to which he can offset interest on operating loans or pay down equipment loans. Other farmers are engaged in custom tiling, custom farm work, in essence, anything to make additional cash flow. Even my wife and I are looking at taking a little herd of goats to make a few extra dollars with limited cost. What I have learned in 66 years is that every dollar has a home on the farm.

Each family will need to find ways to not only cut costs but find new revenue streams to support their overall operations. I read today that we can expect help from the one-year farm bill passed in December 2024. This concerns me as increased dependency on the government usually has strings attached that bring consequences not anticipated. This is not to say that we should ignore programs sponsored by the government. Far from it. Crop insurance and disaster relief are programs we have long been familiar with and are included in normal farm operations. It’s programs that were hastily put in with the temporary Farm Bill that concern me. If we have learned anything from dealing with the government over the years it is that they don’t give us anything without a reason that benefits the government.

So, let’s approach this year with eyes wide open and be extra cost conscious and be sure to factor costs into everything you do. If your farm is going to end the year with additional debt, be sure you know exactly how much and what your options are to deal with that debt.

IndianaAg@bluemarble.net