Special report: Farming for profit
Corn rises as day turns to night.
Nebraska farmers do this as well as anyone.
And as the pivot circles the field, there was a time agriculture was in what some call a super cycle.
Record grain prices brought good times.
“Of great profitability where it wasn't hard to make money farming,” said Tina Barrett of Nebraska Farm Business, Inc.
But as Brandon Hunnicutt climbed on his combine last fall, it was the third straight year of declining farm income. Market forces have driven prices down.
University economists say Nebraska farmers collectively made $4 billion dollars in 2016. That sounds impressive until you realize it was almost twice as high just three years earlier.
Yet, the cost of farming remains high.
Hunnicutt said, “You have your seed cost, your fertilizer cost, you have herbicide, and fungicide.”
On the family farm near Giltner, Brandon Hunnicutt estimates there are 50 or 60 decisions to make just to choose what crop to plant where.
From there, a near infinite number of possibilities.
“You want non-GMO or fully loaded GMO trait, so your price range is completely different. You're looking at $180 a bag to $350 a bag so now your seed cost may be between roughly $80 an acre to $140 an acre,” he said.
And that’s just seed; Fields may need to be scouted and sprayed, and irrigation’s a huge expense.
So is equipment, as tractors and combines can run in the hundreds of thousands of dollars.
“So you have all these expenses that seem to always be there no matter what you do,” Hunnicutt said.
And it’s all done with no guarantees.
Tina Barrett said, “Just taking $700 in cash and putting it in the field and hoping when you're done at the end of the year you can dig it up and come back. And when we're multiplying by 160 acres or 5000 acres that's a huge amount of money going out into those fields with the hope it's coming back.”
Not to mention farmers like Brandon also have families.
He said, “Family expenses never seem to get cheaper. We have a large family, always have kids in activities, doctors bills, gymnastics, and on and on and on.”
That’s why Tina Barrett says each decision is so important.
She explained, “We're putting $100 in seed, $100 in fertilizer, $50 in chemicals, now we're down to $150 bucks to pay for equipment, irrigation, to pay for fuel, anything that goes into that. (And that doesn't leave me any dollars if anything goes wrong, something unexpected.) Exactly. It doesn't take long to look at a pie chart and the margin left over is very tiny.”
The result of all this means budget cuts for the state, and fewer dollars on main street.
Hunnicutt said, “You have all these other little small businesses around, and when you start looking at it - there's a lot of them. All those businesses would not be around if it wasn't for production agriculture.”
Growing more may not be the answer.
“Producers by nature want to produce things,” Barrett said. “They want to grow a crop and it's fun to talk about high yield and achieving a high marketing price. Those things are easy and fun to talk about. But we don't sit around and talk about who's cost of production is lowest.”
But that may be key, if growers hope to survive to farm again next year.