Higher interest rates, heavier debt and increased costs have Midwest farmers drawing comparisons to 1980s struggles

   

Photo by Jesse Gardner on Unsplash

In a report for Wisconsin Public Radio, Hope Kirwan reminds listeners of an agricultural downturn of 40 years ago when “a decline in crop prices and farmland values, massive amounts of farm debt and high interest rates led to a landslide of farmers forced to leave the industry. By the end of the decade, an estimated 300,000 farms went bankrupt or foreclosed.”

While the comparison is understandable — a conflict with Iran, higher fuel and fertilizer prices — farmers and economists alike recognize that unlike then, the federal government now provides more safeguards, such as crop insurance. But the difficulties still are threatening, as Kirwan reports, “Profit margins for U.S. corn and soybeans have been negative for the past two years, according to data from the U.S. Department of Agriculture.”

The WPR report quotes Seth Meyer, an agriculture economist at the University of Missouri, who says today’s safeguards “won’t keep people from exiting” but can allow “a more orderly result. So folks aren’t knocked out by one bad situation, some of which is out of their control.”

One such situation has California lettuce growers plowing their crops back into the ground. The Wall Street Journal reports that the outbreak of the cyclospora virus, even though it has not been connected to domestic production, has instilled so much fear in consumers that “growers can’t afford the expense of picking and storing crops they might not be able to sell.”

In response to the challenges farmers are facing, U.S. Secretary of Agriculture Brooke L. Rollins announced on Tuesday at Minnesota Farmfest that the federal government is implementing “a series of data modernization payment flexibility, and enhanced crop insurance options to benefit farmers.” In a USDA press release, Rollins said, “We’re modernizing how USDA serves farmers, providing common sense flexibility when it’s needed most, and strengthening the risk management tools producers depend on.”

The Wisconsin farmer quoted in the WPR report said he’s hoping to hang in there until commodity prices begin to rise again. “Everything we do is managing risk, and there’s a cost to that,” he said, while expressing optimism.

The California lettuce farmer quoted by WSJ seemed to agree. “You can’t afford to be downcast very long,” he said. “You better pick yourself up, dust yourself off and keep pushing forward.”