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Increasing financial stress is impacting how producers think about farm growth

An ag economist at Purdue University says increased financial strain is impacting farm growth expectations for crop and livestock producers. 

Michael Langemeier says the current state of the ag economy is making it difficult for farmers to plan for the future.

“This is the third straight year of very low margins,” he says. “Margins as low, if not lower than what we saw in 2014 to 2019. There’s more people in that stay the same and wait category.”

He tells Brownfield more than 60 percent of respondents in the April Purdue University/CME Group Ag Economy Barometer survey said they do not expect to expand in the next five years.

“The drought is really impacting the Plains,” he says. “Rather than growing, there are producers actually liquidating some of their cows because they don’t have enough grass to feed their animals. There’s no guarantee that three years from now, calf prices are going to be as strong as they are now.”

Langemeier says as farmers look to grow, they can take on more risk.

The Barometer is a nationwide measure of the health of the U.S. agricultural economy and surveys 400 agricultural producers on economic sentiment each month.

AUDIO: Michael Langemeier, Purdue University