When farmers struggle, it has an outsized impact in rural areas. "The communities they live in and the businesses that supply them with seeds, fertilizer, equipment and services are struggling as credit conditions steadily deteriorate in a fragile rural economy," Bloomberg reports.
Not only are farmers buying fewer supplies, but, since trade on the flooded Mississippi River has been closed for most of the month, suppliers are having a hard time getting their products to farmers, and farmers are having a hard time selling their surviving stored produce, Bloomberg reports.
"The deluge is just the latest blow to the farm economy. Even the $28 billion in promised tariff aid may not be enough to rescue rural America from the onslaught of bad news," the reporters write. "There’s been a steady deterioration in agricultural credit conditions, the Kansas City Federal Reserve [Bank] said in its May report. Farmer sentiment has plunged to levels not seen since October 2016, the month before Donald Trump’s election victory, a Purdue University/CME Group index showed this month. Net farm income last year was about half of the $123 billion earned in 2013."
There are a few bright spots: Chicago corn futures have increased about 30 percent since May, so farmers who were able to plant and can get a decent yield will likely get a good price, Bloomberg reports, and worries of a smaller corn harvest have led ethanol plants and animal feeders to bid higher prices on stored corn harvests from last year.