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Farmers tackling margin squeeze period, economist says

An ag economist says it could take a few years to resolve the current downturn in the farm economy.

“We’re definitely no longer in 2022,” said David Widmar with Agricultural Economic Insights.

Widmar says farmers are trying to handle higher costs with lower incomes. “We’re just getting into the thick of it. We’re just now sizing up the challenges. We knew it wasn’t going to be a good year given the low commodity prices. Producers then started using up working capital, that first line of defense for their liquidity needs. We’ve seen working capital shrink.”

He tells Brownfield the ag industry has entered a “margin squeeze” period. “When commodity prices tend to fall faster than producers can adjust their cost of production.”

Widmar says some producers have had to use more non-real estate farm debt.

AUDIO: David Widmar 8-16-2024