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 US$400 per acre for their corn and soybean crops. This year,
it's possible that every acre Byers farms will cost him US$50, The Salt reports.
"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."
Across the country, a number of farmers are
likely to take a big pay cut this year. Nationwide, the US Department of
Agriculture expects farmers will earn a third less than they did last year.
That blow to the bottom line is rippling
through farm towns.
The prices of everything from corn to sugar
have fallen, too. So some economists predict lower prices at the grocery store
later this year.
Record corn production with no increase in
demand – as well as a leveling off market for ethanol – have led to the lowest
prices in six years: US$3.80 a bushel, down from an all time high of US$8.49 a
bushel in August 2012.
Some farmers won't break even this planting
season, which could force them to tap into their savings. That's bad news for
Corn Belt towns whose prosperity depends largely on farmers and businesses
linked to farming.
Frank Hofreiter owns the New Holland farm
equipment dealership and employs 17 people in East Havana, Illinois.
When corn prices peaked, Hofreiter sold
close to US$11 million worth of shiny blue tractors in a single year. He says he
doesn't expect to crack US$3 million in 2015.
"Everybody's just trimming back and
not doing much buying on new equipment," says Hofreiter.
"Especially
big, large equipment — anything over US$20,000."
Read more and listen to the podcast HERE.
The Global Miller
This blog is maintained by The Global Miller staff and is supported by the magazine GFMT
which is published by Perendale Publishers Limited.
For additional daily news from milling around the world: global-milling.com
No comments:
Post a Comment