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2008 World AIDS Day
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2008 Browns season
Economy
Local farmers cautiously optimistic
Monday, June 09, 2008
While other sectors of the area's economy falter, many local farms are flush with cash after 2007, said to be the best year for grain farmers since the 1970s.
But with greater reward has come greater risk and volatility.
Extras
While prices for crops such as soil, corn and wheat have risen recently as a benefit to farmers, it is also costing them more to plant, said Jim Timmons, a Clark County farmer. "The risk is worse because we're dealing with two and three times the dollars," he said.
Prices for phosphorus, nitrogen and potash, essential for growing corn, have more than doubled in some cases, he said. While nitrogen sold for about $400 a ton in previous years, the cost has more than doubled to about $1,000, he said.
Land rents have gone up as well, he said. The same issues are affecting farmers throughout the area.
"Farmers are very nervous because our outlay is so much higher," said Mike Clark, 63, who raises corn, soybeans and wheat on 5,750 acres in Warren, Montgomery, Greene and Butler counties with his wife, Peggy, and son David.
Clark estimated his costs of growing crops are up 40 percent in the past year. He said the average crop prices he's been receiving per bushel — about $4 for corn and $10 for soybeans — are significantly lower than the record prices in the news. And last year's net income for Mike Farm Enterprises — $80,300 — was reduced by drought, which cut soybean yields by 30 percent.
Heavy rains, like the ones that submerged large sections of Clark County this week, can also ruin acres of crops late into the season, Timmons said.
Still, U.S. family farms with sales of $250,000 or more are forecast to have average farm income of $167,840 in 2008, up 11 percent from 2007. Just 8 percent of all family farms, they account for almost three-fourths of income from farm sources.
The robust farm economy has meant hefty profits for corporate agribusiness, from Deere & Co., maker of John Deere farm equipment, to agribusiness titan Cargill, whose $1.03 billion in net earnings for the first nine months of fiscal 2008 were up 86 percent from last year.
But with record crop prices comes risk as fertilizer, seed and other input costs rise. A farmer who last year borrowed $250,000 to pay for putting out his crop might this year seek loans of up to $500,000, said Michael Westfall of Farm Credit Services of Mid-America, whose growth may top 12 percent this year.
Timmons noted that while crop prices are bringing in cash for farmers now, they tend to fluctuate and likely won't stay this high for long. "We're going to get one or two years of good money," he said, "but it's going to turn around."
-Matt Sanctis contributed to this report
