Farm finances continued to spiral downward during the summer according to a recent report from the Kansas City Fed. Bankers in the District reported that the agricultural economy and farm income remained stressed in 2019, with limited signs that they’ll improvement in 2020. The majority of agricultural lenders noted a decline in profitability across all reporting regions. Lenders were concerned about their agricultural borrower’s lack of liquidity, low income, and increased leverage on loans, while producers reported they were concerned about trade, tariffs and weather. Ag bankers in the Midwest and Plains understand that some farmers and ranchers will liquidate assets during the winter to stay afloat, while many highly leveraged operators will be forced out of business. Ag lenders in the District also expect higher ag loan delinquency rates heading into 2020 for both production and real estate loans. The American Bankers Association and Federal Agricultural Mortgage Corporation also released a survey of ag lenders last Monday that indicated that about 57 percent of farm borrowers were profitable in 2019, although many said that their profits were declining.
The Santa Fe based Western Landowners Alliance advocates for policies and practices that sustain working lands, connected landscapes, and native species. The group is calling for policies and practices that will both support wildlife and help agriculture to succeed. The group is renewing a call for policy makers and citizen groups to look at farmers and ranchers as their most important partners, not their adversaries. Executive Director Leslie Allen said that it’s the success of agricultural lands that helps to sustain endangered species and natural resources in the West, but because agricultural margins are slim, working lands in the Region are disappearing at an alarming rate. However, Allen understands that there are some good things happening too, for example, the National Resource Conservation Service has a number of programs that helps land owners improve conservation practices. For example, in Colorado, the NRCS and The Colorado Department of Parks and Wildlife have partnered to help pay landowners for providing critical winter habitat for elk and deer. In some cases, landowners are leaving the last cutting of hay in their fields for wildlife to harvest during the winter.
According to the USDA’s Rural America at a Glance Report, rural communities are facing population declines, slow employment growth and higher poverty rates than urban areas. Personal income has declined in recent years in part because farm and mining income has dropped. When comparing urban and rural areas, from 2010 to 2018, metro counties saw a 7 percent increase in rates of population change in contrast to a nearly 2 percent decrease in completely rural, non-adjacent counties. The highest rates of population loss were in isolated, completely rural areas.
Farmers and ranchers are in line to get another trade aid payment in the next few weeks, according a tweet sent by President Trump. The first set of 2019 payments, covered the 50 percent of farmer’s eligible production, while this upcoming payment will cover an additional 25 percent. Although Trump tweeted that “The smaller farms and farmers will be big beneficiaries,” Senate Democrats argue the trade aid program has unfairly favored big farms over smaller producers, while boosting foreign-owned conglomerates like Brazil’s JBS, and disproportionately helped certain regions and commodity sectors over others.
American novelist, travel writer, and journalist Martha Gellhorn wrote, “In November you begin to know how long the winter will be.”