USDA is forecasting net farm income to jump nearly 30% this year, but talk to row crop farmers today, and they'll tell you that's not the case. From farmers and ag lenders to ag economists keeping a close eye on the fragile state of the farm economy, many fear this year could be worse than last as the possible impact of tariffs is throwing even more uncertainty into the mix.
Currently, U.S. farmers are focused on what they can control: putting a crop in the ground. The wheels are already in motion this spring for northwest Iowa farmer Ben Riencshe.
"We're putting on fertilizer, we're doing a little light tillage, ammonia, phosphorus and potash and getting fields ready. It will be a few weeks before we put seed in the ground," says Riensche, owner and operator of Blue Diamond Farming Company, which is located in Jesup, Iowa.
Farmers' Biggest Concern? Cash Flow
Dry conditions this winter are helping Riensche get in the field a little early. It's a hopeful start to what could be another challenging year.
"Locally, it's been dry, so we need to catch up with rain. But a dry spring is usually a blessing, just as long as we catch up later," Riensche says. "I think more on the mind of farmers is finance. We've had a couple years of drawdown on farmers' working capital. Prices are probably slightly below most farmers' cash flow level of production. $4.50 corn, which we think is a gift compared to harvest time last year, still doesn't quite reward unless you've got a tremendous amount of equity in your land or machinery."
Two-Thirds of Ag Lenders Are More Worried about 2025 Compared to 2024
Creighton University releases a survey of ag bankers each month called the Rural Mainstreet Index (RMI). The latest RMI shows two-thirds of ag bankers think 2025 will be worse than 2024, and Riensche agrees.
"If we stay on the current course, I think that's exactly true," he told U.S. Farm Report. "I think grain farmers will have another year of drawing down working capital."
Input costs are still a pain point for farmers like Riensche, with some inputs elevated from even last year.
"They haven't come down much. Fertilizer's even made a little attempt to go up. I wish there was a little more competition in that space," he says. "And machinery, oh my gosh, the inflation in machinery. A lot of analysts say we're up one-third over the past five years, but it really feels like 50% by the time you look at repairs. The repairs on these newer diesel engines with the emission systems are just so costly it's half of our engine repair costs now."
