USDA Predicts 2014 Farm Profits to be Down for Farmers
(SIOUX CITY, IA) There are a lot of unknowns when it comes to farming -- will we get enough rain? Too much rain? An early freeze? Now there's another thing for Siouxland farmers to worry about.
There's a new report from the USDA that predicts what profits will be like this year for grain farmers and it's not good news for most.
Just when grain farmers thought they were safe from the heat of 2012 and lower grain prices in 2013, they may be hit with yet another hurdle in 2014.
The US Department of Agriculture said farmers will likely see an almost 30% decrease in profit this year.
Corn for example is predicted to sell at about 4.50 per bushel. Last year, the average price was almost $7 per bushel and that's nothing compared to August of 2012 where corn sold for $8 a bushel.
The Grain Department Manager at the Co-op in Sioux Center, John Hansen, said while demand is still strong production around the world has gone up.
"CRP acres came out and at the same time we became a non-competitive supplier in the world market on prices so other places in the world have increased their production, so we're competing with more countries," said Hansen.
Bad news for grain farmers because more production gives buyers more options leaving farmers with the short end of the stick.
"In most cases, that's the difference between making a profit and breaking even or even having a loss. So, we may have a whole year here, depending what happens in the next few years, where guys don't make any money," said Hansen.
That's if they only produce grain but if you're a farmer of all trades, the loss may go unnoticed.
That's because, Hansen said the price of feed has been pretty high the last 2 and a half years but with the excess production, prices will go down significantly and profit for cattle or hog farmers will go up.
"In the case of cattle, the numbers are down because of the lack of feed supplies the last few years, the herds were slaughtered down because of that," he said.
Hansen said cattlemen may see an expansion in their herd for the first time in years.
The newly signed farm bill cut out direct payments to farmers moving instead to subsidized crop insurance.