Cheap Crops Mean Tight Times For Midwest's Fledgling Farmers
Farmers who just got into the business in recent years found it was a good time to both plant and harvest.
"We were all spoiled little brats the past two years, with $5, $6, $7 corn, yep," says farmer Grant Curtis.
He's sitting in the captain's chair of his combine on a brisk, overcast day in western Illinois. He's driving back and forth over rows of corn on his family's farm. Then he arcs the 80,000-pound machine off course towards a single stalk he missed.
"Right there is a prime example of trying to get the last little bit there," he says. That really matters these days: Corn is selling at half the price that it did only two years ago, so every kernel counts. Especially for beginning farmers like Curtis.
According to the U.S. Department of Agriculture, a quarter of all farms in the country are now operated by beginning farmers.
Nathan Kauffman, an economist with the Federal Reserve Bank of Kansas City who has studied the trend, says these farmers typically have less cash on hand, fewer assets, and take on more debt.
"A lot of them have to take on some level of financing in every crop year," he says. "And if profit margins are low, and especially if they're negative, then it makes meeting the debt obligations difficult. Obviously that's not a good thing."
Unlike the older generation, these younger operators typically don't own the equipment they need to farm. They have to buy or lease it.
During the good times, beginning farmers like Curtis ran up a line of credit and took out loans to pay for land, seed, fertilizer, chemicals and equipment. Curtis also installed drainage tile to improve his land's fertility. At harvest time, he'd pay back those loans.
But this year, he won't be able to put money into the farm. He says he'll barely earn enough to cover the basics.
The drop in commodity prices has him worrying about his future. In order to continue farming full-time, he needs to grow this operation into a self-sustaining business. And that takes more land.
Curtis owns a little land, manages a lot for other farmers and rents some land, which means that even though he has less money coming in, he still owes fixed rent to someone else. He's not looking forward to the conversation he has to have with his landlord.
"It's an awkward situation to be in," he says. "It would be like asking for a lower rent at your house because you had to get another job because you were laid off."
If crop prices stay low, Curtis will have to do what a lot of beginning farmers have already done: take an off-farm job.
That's what Drue Calvert does. He considers himself a farmer, but he's worked in agricultural sales since graduating from college in his early 20s. Now, he's 34. During the harvest, he takes the company truck to visit customers in rural Illinois.
He says he enjoys the work, but what he really wants is to quit and farm full-time.
"That's my biggest goal: to be self-employed. I mean, that's what I wake up thinking about. I really don't want to still be doing this when I'm 40," he says.
The farm Calvert wants to own belongs to his dad. He operates about a quarter of it now. He farms in the evening and on weekends, borrowing the equipment.
Last year, Calvert's father came to him ready to talk about passing down more ownership. But when Drue Calvert brought up the topic this year, his dad said no, saying he didn't want to saddle him with more debt when crop prices are so low.
And if they go any lower, Calvert and his peers will face new challenges as they strive to become the next generation of family farmers.
Abby Wendle is a reporter with Tri States Public Radio and Harvest Public Media, a public radio reporting collaboration that focuses on agriculture and food production.
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Transcript
RENEE MONTAGNE, HOST:
It's been a good ride recently for many of America's farmers. Take Grant Curtis, who grows corn in Illinois.
GRANT CURTIS: We were all spoiled little brats the past two years with $5, $6 and $7 corn, you know?
MONTAGNE: Now corn is selling at half the price it did in 2012. And Curtis is among those the drop in price is hitting hardest - the new generation of farmers. Abby Wendle of Tri States Public Radio paid a visit to his farm.
ABBY WENDLE, BYLINE: Grant Curtis is sitting in the captain's chair of his combine on a brisk, overcast day here in western Illinois. He's driving back and forth over rows of corn on his family's farm. Then he arcs the 80,000 pound machine off course towards a single stalk he missed.
CURTIS: Right there's a prime example of trying to get the last little bit there (laughter).
WENDLE: With corn prices way down, every kernel counts, especially for beginning farmers like Curtis. According to the U.S. Department of Agriculture, a quarter of all farms in the country are now operated by beginning farmers. Nathan Kauffman is an economist with the Federal Reserve Bank of Kansas City and has studied the trend. He says these farmers typically have less cash on hand, fewer assets and take on more debt.
NATHAN KAUFFMAN: A lot of them have to take on some level of financing in every crop year. And if profit margins are low or especially if they're negative, then it makes meeting the debt obligations difficult. Obviously, that's not a good thing.
WENDLE: Unlike the older generation, these younger operators typically don't own the equipment they need to farm. They have to buy or lease it. During the good times, beginning farmers like Grant Curtis ran up a line of credit and took out loans to pay for land, seed, fertilizer, chemicals and equipment. Curtis also installed drainage tile to improve his land's fertility. At harvest time, he'd pay back those loans. But this year, he won't be able to put money into the farm. He says he'll barely earn enough to cover the basics.
The drop in commodity prices has him worrying about his future. In order to continue farming full-time, he needs to grow this operation into a self-sustaining business. And that takes more land. Curtis owns a little, manages a lot for other farmers and rents some land, which means that even though he has less money coming in, he still owes fixed rent to someone else. He's not looking forward to a conversation he has to have with his landlord.
CURTIS: It's an awkward situation to be in. It'd be like going and asking for a lower rent at your house because you maybe had to go get a different job 'cause you were laid off.
WENDLE: If crop prices stay low, Curtis will have to do what a lot of beginning farmers have already done, take an off-farm job.
(SOUNDBITE OF PHONE RINGING)
DRUE CALVERT: Hello.
UNIDENTIFIED MAN #1: Hey, (unintelligible).
CALVERT: Are you available right now?
UNIDENTIFIED MAN #1: Yeah, (inaudible).
WENDLE: Drue Calvert calls a customer while driving down a narrow road carved out between fields of corn and soybeans. Calvert considers himself a farmer. But he's worked in agricultural sales since graduating from college in his early 20s. Now he's 34. During the harvest, he takes the company truck to visit customers in rural Illinois. He says he enjoys the work, but what he really wants is to quit and farm full-time.
CALVERT: That's my biggest goal, is to be self-employed. I mean, that's what I wake up thinking about. I really don't want to still be doing this when I'm 40.
WENDLE: The farm Calvert wants to own belongs to his dad. He operates about a quarter of it now that he farms in the evening and on weekends, borrowing the equipment. Last year, Calvert's father came to him ready to talk about passing down more ownership. But when Drue Calvert brought up the topic this year, his dad said, no, saying he didn't want to saddle him with more debt when crop prices are so low. And if they go any lower, Calvert and his peers will face new challenges as they strive to become the next generation of family farmers. For NPR News, I'm Abby Wendel in Macomb, Illinois.
MONTAGNE: That story comes to us from Harvest Public Media, a public radio reporting collaboration focusing on agriculture and food production in the Midwest. It's MORNING EDITION from NPR News. I'm Renee Montagne.
STEVE INSKEEP, HOST:
I'm Steve Inskeep. Transcript provided by NPR, Copyright NPR.
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