INVESTING CHECKOFF DOLLARS
DOWN BUT NOT OUT Farm economy hurting, optimism abounds BY MATTHEW WILDE
F
armers are making less money, working capital is scarce and borrowing is up, according to the latest government statistics. Economists expect the disturbing trends — bolstered by a reduction in U.S. soybean exports to China due to the ongoing trade war between the nations — to continue in 2019. But there’s hope for better days ahead. “Despite the obstacles, I see opportunities,” says Arlan Suderman, chief commodities economist for INTL FCStone. The challenges are sizable this year.
20 | DECEMBER 2018 | IASOYBEANS.COM
According to the U.S. Department of Agriculture (USDA) Economic Research Service: • Net farm income, a broad measure of farm profitability, nationwide is projected at $65.7 billion. That’s 13 percent lower than 2017 and a nearly 50 percent drop in five years. • Available working capital nationwide is down 68 percent since 2012 to about $50 million. • Total farm debt is projected at a record $406.9 billion, up 3 percent from 2017. • Farm debt-to-asset ratio, on average,
is projected at 13.4 percent — the highest level since 2009 and the sixth consecutive increase. • The farm debt-service ratio is projected to increase to 27.8 percent, the highest level in 30 years. At the Agri-Pulse Ag Outlook Forum on Sept. 27 in Kansas City, Suderman rattled off three economic opportunities for farmers — expanding trade, corn supply and demand and African swine fever. All could eventually lift the sagging farm economy. “I’m a glass-half-full kind of guy,” Suderman says.
