News

Farmers face mounting losses amid low prices and rising production costs

A Kansas farmer says it isn’t just low commodity prices that are causing problems for producers. Paul Penner says rising input costs are putting farmers in a tough spot. “Every bushel of crop that’s being produced is produced at a loss, and that can only be sustainable for a certain amount of time before you lose equity and find yourself unable to make payments,” he says. 

Many ag groups, like the American Soybean Association, have been sounding the alarm because China, the largest buyer of U.S. soybeans, hasn’t made a noticeable purchase of the commodity since April.

Penner tells Brownfield, “It’s not just one industry that’s struggling with this.  Every sector of the farm economy, with the exception of cattle right now, is facing that.”

AUDIO: Brownfield’s Kellan Heavican’s interview with Paul Penner, Kansas farmer

ASA has been very vocal about the impact the trade disruption has had on the price of U.S. soybeans.

But, CEO Stephen Censky, who also served as the Deputy Secretary of Agriculture for the USDA during the first Trump administration, tells Brownfield the cost of fertilizer and machinery has increased at a disproportionate rate.  “And that’s one of the things we’re also talking to the administration about is what can you do to try to address those, whether it’s competition issues,” He says.  “But let’s not forget, there’s also an element of tariffs in that as well.”

He says a recent story from North Dakota State took a closer look at how the administration’s trade policy is impacting the entire ag industry. “It affects different inputs in different ways,” he says.  “But tariffs are probably raising farmers’ costs by around 12% is what they found. And that’s just right now, and it could get worse.”

AUDIO: Stephen Censky, American Soybean Association

Trade tensions between the U.S. and China have escalated in recent days following President Trump’s threat to impose 100% tariffs on China in response to the country’s announcement that it would restrict exports of rare earth minerals.