Commodity prices have not kept pace with rising costs, leaving many row crop growers struggling to keep their operations on positive footing headed into the new year.
Randy Dowdy, high-yield corn and soybean farmer and agronomic consultant, paints a stark picture of the economic pressure bearing down on American farmers.
Fresh from a visit with customers, Dowdy says the same three questions dominate almost every discussion he had with growers:
Where can we cut costs?
Where do we have to spend money to stay in business?
How do we service existing debt when margins are razor thin?
Even with strong yields this year, many of the farmers, he notes, "could not outyield the balance books." Commodity prices have not kept pace with rising costs, he says, leaving farmers struggling to keep their operations in the black.
Costs Have Soared, Partly Due To Regulations
Dowdy contrasts his early years in farming with today's reality. When he started farming in 2008, his first tractor cost between $150,000 and $175,000. Now, he says, a similar horsepower tractor "can run roughly three times that dollar amount."
He traces a significant part of that escalation to emissions and environmental regulations that began ramping up in the late 2000s. He recalls an initial price jump, followed by annual increases of 6% to 8% since then, compounding the burden on farm finances. The complexity that comes with the machinery systems, he argues, also has stripped farmers of their ability to repair their own equipment.
"You can't work on [equipment] without a computer. Even the technicians can't work on them without a computer," he mentioned on a recent AgriTalk segment.
Noting not all of the price jump is due to emissions controls, Dowdy believes the regulatory wave gave some manufacturers cover to raise prices.
Dowdy said he's not opposed to supporting agricultural niches - all of the profitable corn and soybean growers he recently met with have some kind of specialty angle.
"If there's a little help for those guys, I don't have a problem with it. But at the end of the day, the row crop farmers are where the help needs to be," he notes.
Part of the help has to do with machinery costs. He highlighted cotton pickers as one example.
"The cotton industry's got one manufacturer that I'm aware of that makes a cotton picker. One. And it's $1.2 million," he says. "Where's the competition that helps make that thing affordable?"
Dowdy doesn't claim to have all the answers, but he would like a "seat at the table" to have a candid conversation with policymakers and regulators focused on one core goal: bringing equipment and input costs back within reach so farmers can keep their operations viable.
"I'm all for the farmer," Dowdy says. "If the farmer wins, everybody wins."
