Fewer than 5% of farms saw an improvement in income this year, a drastic downturn compared with the same time last year when one in four farms saw better year over year income, according to Rabobank’s Farm & Ranch Survey. The survey showed:
Agricultural Economy – Concern about the U.S. economy remains with 95% of those surveyed falling within the range of somewhat concerned (34%), very concerned (30%) to extremely concerned (31%). Moving forward, more farmers expect the economy to continue to worsen (54%).
Of those surveyed, 75% believe their answers regarding their outlook would be different if the general economy was better.
Business Conditions – Regardless of acreage, U.S. producers are more distressed regarding their income. Approximately 40% believe their income will be worse next year, when compared with previous surveys. However, 27% of respondents have some optimism that their income will improve.
Additionally, higher input costs continue to be the most frequently mentioned economic challenge facing U.S. farmers. Three in five farmers rank it the primary factor that has contributed most to the economic challenge they are confronted with. Additionally there is an increasing concern regarding reduced demand (55%) and weather conditions (57%).
Risk Management – Nearly all surveyed (94%) are concerned about price fluctuations. What seems somewhat positive is that the degree of concern has lessened – those extremely concerned dropped from 62% to 48%. To manage that concern, 45% have implemented or plan on investing in risk management or marketing strategies.
Expansion Plans – Hiring plans are relatively unchanged, with three-quarters of farms still expecting hiring levels to be the same as last year. However, farmers who are concerned with the economy will reduce their employee base.
Additionally, 66% of those surveyed have no plans to purchase farm equipment. However, farms in operation 40 years or more are planning to buy equipment compared to newer farms.
In terms of land purchases, nine in 10 plan to keep farms the same size. The only change in land seems to be a slight increase in those who plan to sell land – 5% vs. 2% in the survey earlier this year.
Regional information and further data is available at www.rabobankamerica.com/survey.
-- Rabobank release