Tightening Our (Farm) Belt

February 12, 2019
Quick Reads background image

Hurt In The Heartland

From meat to milk and the vegetables in between, more American farmers filed for bankruptcy last year than during the financial crisis a decade ago.

Why Now?

‘I’ve been through several dips in 40 years. This one here is gonna kick my butt.’

Kirk Duensing, Nebraska Farmer, who says low prices for soy & corn crops combined with high interest loans has left him more than $1M in debt. He has sold land and equipment to try to stay afloat.

Why Now?

  • Oversupply of crops (at home & overseas) fuels lower prices.
  • High Debt – Farmers currently carrying the highest debt in 4 decades (in part because of borrowing to cover several years of low crop prices).
  • Trade: Tariffs (or taxes) on American grown crops exported to China or Mexico hurts farmers on top of the depressed prices.
‘We thought 2019 would be the year things turned around. Then the trade dispute happened and that really put a damper on things.’

Curt Hudnutt, Head of Rural Banking for Rabobank, one of the biggest U.S. farm lenders, warning bankruptcies among U.S. farmers will increase. The majority of farms lost money last year.

Why It Matters:

Your Kitchen Table: “…bankruptcies are climbing across swaths of the Midwest that produce much of the nation’s grain and meat.” (WSJ)

Your Tax Dollars: Pres. Trump created a $12B fund to help subsidize farmers impacted by trade disputes. Only a portion of the funds have been accessed.

The downward trend in prices is predicted to continue for U.S. farmers. U.S. Treasury Sec. Mnuchin is in China today, where he will continue trade talks this week ahead of the March 2nd deal deadline for the two sides to set new terms or continue the trade war.

by Jenna Lee,