Row Crop Farmers Face Particularly Difficult Financial Squeeze

Smith: As fall harvest season rolls on, many farmers and ranchers are studying their balance sheets. Faith Parum, an economist for the American Farm Bureau Federation, says the difficult ag economy is impacting row crop farmers particularly harshly.

Parum: So, our row crop farmers, but really, all of our farmers and producers, are being squeezed by falling prices and really high input costs. We've seen an increase in a record-high production cost this year, and that's affecting row crop farmers, our specialty crop farmers, livestock producers, all across the board.

Smith: Farmers and ranchers are having to devote more and more of their budgets to the cost of production.

Parum: Fertilizer rising again. It's still not to those highs of 2022, but it's going up. Chemicals, fuel and energy. Interest is really becoming a larger and larger expense in farm budgets, as farmers continue to take out operating loans to make it to the next marketing year, due to all of the decreases in commodity prices. Labor is always increasing, as well as some machinery and repairs.

Smith: Parum says the tough economy is impacting a variety of crops, but each one has a different profitability scenario.

Parum: Cotton's our largest loss at over $300 an acre, and so that's going to be pretty high and really hurt their operations. Peanuts are at a $173 loss, corn at a $169 loss, soybeans at a $114 loss, and rice at a $154 loss. Sorghum and wheat also operating at a loss, well over a hundred dollars. So, all of our row-crop producers are really struggling, and this isn't the first year they've operated at a loss.

Smith: Learn more at fb.org/MarketIntel. Chad Smith, Washington.