There is increasing evidence that farmers and ranchers are undergoing financial stress this year. For example, a Federal Reserve Bank of Kansas City survey of 181 banks revealed that 30% of the banks in its service area reported that farm repayments are lower and have they have had repayment problems with their agricultural loan portfolios. Several years of Working Capital and Carryover Debt have increased the need for Debt Restructuring. About 75% of these banks have denied new farm applications, and nearly 18% of the banks reported that they had denied 10% of Operating Loan requests. A Creighton University survey of 200 bankers in ten states revealed that 10% of 2018’s Operating Loans were not repaid and were rolled into 2019’s loans, which is significant because this practice was common before the farm debt crisis of the 1980s began.
Dairy farm consolidation continues to affect small dairy farms. According to USDA data, 55% of the nation’s milk cows are in dairies containing more than 1,000 cows. As recently as 12 years ago, dairies of this and larger size represented less than 20% of the nation’s total dairy herd. Declining milk prices due to lower domestic consumption and trade head headwinds have motivated dairy operators to focus on lowering costs by increased economies of scale that are obtainable primarily through expansion. Data reveals that dairies having 2,000 or more cows normally have lower milk Production Costs than dairies milking only 100 to 200 cows. According to USDA data, large dairies have 20% lower Operating Costs, 12% lower Feed Costs, and 45% lower Allocated Overhead than traditional, smaller dairies. Even though Labor Costs are 36% higher for larger dairies, the labor in larger operations normally generate greater returns. USDA’s 2017 Census of agriculture revealed that 189 dairies have an average of 7,400 cows. The largest concentration of dairy farms moved west from the traditional centers of the Midwest and Eastern states.
For the third straight year, the volatile pesticide dicamba has damaged crops across the Midwest and South, despite federal and state efforts to lessen herbicide drift from this herbicide. This year, high levels of complaints continue to come in from across these Regions, but states are not reporting those numbers to the U.S. EPA, according to a report by the Progressive Farmer magazine in August. Farmers in Illinois, the nation’s leading soybean producing state, have reported record levels of crop damage caused by pesticide drift in 2019, with 590 dicamba-related complaints as of Aug. 23. In 2017, the state had 246 dicamba-related complaints, and in 2018, the state had 330 reports. These complaints also include what has happened to natural areas across the state and even trees in people’s yards. Herbicides can drift from the target area where they are sprayed by either particle drift or vapor drift. Particle drift is usually a result of wind carrying droplets of the chemical mix to off target areas immediately adjacent to where the herbicide is applied. But when herbicides such as dicamba are applied to tolerant crops, it can vaporize due to warm temperatures, and then be carried by air currents sometimes for several miles away from the application site, where it affects sensitive crops, natural plants, fruit and landscape plants.
Today’s thought is from American writer and management consultant Margret J. Wheatley, who said, “Probably the most visible example of unintended consequences, is what happens every time humans try to change the natural ecology of a place.”