An abundant supply and not enough demand have left farming families across the nation hurting to keep a steady income as the purchase price for agriculture commodities is taking a steep drop, Barry Flinchbaugh, professor in agricultural economics, said to his agricultural policy class.
“My family is going through a super rough patch,” Celine Beggs, senior in agricultural communications and agricultural economics, said. “In comparison to years past, our yields are actually looking to be higher than normal. But at the end of the day, we will still be in the red.”
Beggs grew up on a family farm in Clearfield, Iowa, where she said some of her fondest memories were helping her dad on the tractor or working in the fields.
“We all love our family farm and would do anything to keep the farm under our name,” Beggs said.
Now, Beggs said her family, much like many others, will not be able to sustain another growing period because of low purchase prices.
“Being a smaller farm of about 180 acres, we don’t have the storage to save our crops until prices are higher,” Beggs said. “We have to sell them now even though the return rates are poor.”
To combat this, Beggs’ family has contracted their farmland into the government’s Conservation Research Program, a land conservation program that pays farmers who agree to cease agricultural production in exchange for improving the environment. Over 10 years, the Beggs’ family will seed down their farm with natural prairie grasses and wildflowers.
“We’re essentially removing all traces of the farmland,” Beggs said. “We will continue to mow and care for the land, so that when the contract expires in 10 years, we will be ready to start farming again.”
More and more farmers will be looking into programs like the Conservation Research Program and other governmental subsidies, Flinchbaugh said, but there are limits on the number of acres that can be enrolled.
“I think a lot more farmers will try to enroll (in the Conservation Research Program) due to the significantly decreasing farm income,” Flinchbaugh said. “A priority in Congress needs to be to increase the funds available for the amount of acres allowed to be in the program.”
For Beggs, she said this is one of the hardest decisions her family has ever had to make.
“But there comes a point where you have to put economic reasoning over emotional attachment,” Beggs said.
“It is a necessity for our family to keep the farm in our name,” Beggs said. “So if we have to take 10 years off to ensure that, we are going to follow through.”
Risk Across the Nation
About 1,700 miles west, Mary Marsh, freshman in agricultural communications and journalism, comes from a family farm in Arbuckle, California, where they grow almonds.
“We are fortunate in that we are not seeing the impact of the low purchase prices as bad as other farmers in the area, thanks to our trees having already been in production and paid off,” Marsh said. “But not everyone is that lucky. For those around us who have taken out loans or borrowed money to invest in their newer orchards, they will not be seeing a return on those investments anytime soon.”
While some farmers say agriculture can be summed up in the word “risk,” Marsh said that her family has slightly less risk than other farmers such as those who grow wheat.
“When you invest in orchards, you’re investing for at least 20 to 30 years,” Marsh said. “This is not a one season type of thing. So if you have one or two bad years, you can recover in the long run. It is a very different ballgame than growing wheat. For them, you have one bad season and your income is drastically hurt.”
Even seemingly optimistic about the coming year, Marsh said her family will still make adjustments in their growing methods to ensure they are not too negatively affected by the purchase prices.
“This is a very real situation,” Marsh said. “We will cut down on chemical uses and other small adjustments like that, just to be safe.”
With a new farm bill expected to be passed in the next few years, Beggs said there is still a risk to being enrolled in the Conservation Research Program.
“Agriculture is all about risk, though,” Beggs said. “And the risk of being enrolled in (the Conservation Research Program) is a lot less risky than us losing our family farm.”
With a slightly different perspective, Sam Davis, sophomore in animal sciences and industry, said some might see a benefit in the low commodity prices seen nationwide.
“From a little different point of view, my dad is a feed salesman and the low prices of commodities have lowered the price of feed, particularly bulk cubes,” Davis said. “This helps him because he is able to sell more feed, which outweighs the price cut he is putting on the feed.”
According to AgriPulse, cash receipts, “the cash income farmers get from crop and animal sales,” is expected to see a 7 percent drop in 2016 due to a surplus.
Prices of these commodities will appear cheaper to salesman and consumers, Beggs said, but they have to look at the bigger picture.
“I wish these people would take a step back and look at the small farm and the local farmer,” Beggs said. “Really look at how it is impacting us. It may look awesome for consumers, but it is taking farmers like us out of the market. The outlook is not looking good for at least 10 years. How will we ever be able to feed the world?”