WATCH: Down Times Have Farmers Looking To Cut Costs
The federal government expected net farm income and farm profits to fall in 2016, the third-straight year of declines. That means farmers and ranchers are taking a closer look at their finances, and many aren’t very optimistic about their prospects for 2017.
The Nebraska Power Farming Show in Lincoln is kind of like the Super Bowl of farm equipment, with almost 900 vendors and thousands of producers from all over the Midwest in attendance. It you’re looking for a place to find out about some of the tough economic choices farmers are facing, it’s a pretty good place to start.
Farmers visiting the tradeshow were talking about cutting costs. Some are delaying big equipment purchases, holding on to their combines instead of shelling out for a half-million-dollar new one. Many are leasing instead of buying. Some equipment dealers at the Power Farming Show said they’ve seen a 50 percent drop in sales.
Experts like Jay Parsons at the University of Nebraska Lincoln say now is the time for farmers to be cautious, but also be on the lookout for good deals on used equipment and other opportunities that often come with a down economy.
“Ag moves forward and we make innovations every day and so they need to really analyze what that new technology is worth to them,” Parsons says. “Can they afford to put off that adoption decision for two or three years, or should they just go ahead and find a way to make it work?”
Tina Barrett advises producers on how to navigate the rough economic times, and says more farmers and ranchers should write down their working cash flows. Refer to cash flow often, Barrett says – it can help farmers keep a closer eye on what they’re spending and what they can afford.
Despite the shaky farm economy, many producers say they’re used to the ups and downs of their industry and plan ahead for the lean times. Thus far, most economists say they don’t expect the current downturn to plumb the depths of the 1980s farm crisis.
For more on farmers facing tough financial choices, watch the video below.
Jack Williams is a reporter for NET Nebraska and Harvest Public Media.