Record corn production combined with no increase in demand and a leveled-off ethanol market have led to the lowest prices for corn in six years. And it’s not just corn producers who are facing challenges; nationally, the USDA estimates that farmers will earn a third less than they did last year. The economic impacts are being felt acutely in farming communities, where prosperity depends largely upon the success of farming and allied businesses.
Grain farming isn’t cheaper than it used to be: inputs such as seed, fertilizer and chemicals are fixed. And with land costs so high, many farmers have rented acreage to grow their crops. Even though grain prices have plummeted, many landowners can’t (or won’t) lower rents. This is leading to more breached contracts.
It’s a complex situation, and a sad one.
Abby Wendle reports for NPR. (Audio and print).
On a recent snowy afternoon on a farm in central Illinois, Dan Byers parked his pickup at the end of a dirt road and looked over some of his fertile land. A few years ago, high grain prices earned farmers here about $400 per acre for their corn and soybean crops. This year, it’s possible that every acre Byers farms will cost him $50.
“It just takes a certain amount of fixed money to put a crop in and raise it,” says Byers. “At today’s prices, not much of anything works right now until there’s a rebound.”