Farm bankruptcies on the rise in Nebraska
It's a triple threat that's too much for some farmers, as the combination of low prices, high taxes, and tariffs takes a toll.
Farmers Myles Ramsey of Kenesaw said, “It's three strikes and I know some guys are out. They will be selling this fall or next spring. I'm sure my farm income is down half. I've burned up any working capital I had built up two years ago. I burned that up. I'm very close to my banker right now, developing a plan for next year.”
The Federal Reserve Bank of Minneapolis says farm bankruptcies in the upper Midwest are double what they were a few years ago. In Nebraska, online court records show 31 in the last year, up from 20 the year before.
“We're also seeing loans amounts farmers are having to take out for cash flow purposes go up, so we're seeing those delinquencies rise a little too,” said Jay Rempe, senior economist with Nebraska Farm Bureau.
Commodity prices are a fraction of what they were a few years ago.
Rempe said, “2017 net farm income in Nebraska is down over 60 percent over its highs in 2013, so that's definitely a shock to the farm economy and you add these tariffs and impact, that doesn't help in terms of trying to struggle our way out of this.”
Soybean growers have been completely shut out of China, their top market.
Ramsey said, “We're about up to breakeven levels on corn prices on our corn price now, soybeans are still way below breakeven. I don't think it'll take much positive news for the markets to rejoice and reward us.”
There was a bounce in the markets when President Trump announced new tariffs on China were on hold. Farmers hope it's the start of a turnaround on trade.
“I'm still hopeful in a year or two we'll get back into positive margins and start making money and be able to upgrade equipment and do what we need to do,” Ramsey said.
And while there are only a few dozen farm bankruptcies in the state, there are likely many more farmers with unhealthy levels of debt.
The problem appears to be growing in the Midwest and plains, however, in the rest of the country, farm bankruptcies are actually a little less than last year, according to the American Farm Bureau Federation.