Over 5,000,000 acres of corn were grown in Indiana last year.
(Max Rebolledo/WTIU)
Farmers in Indiana, such as Dwight Ludwig, often work with the state staple crops: corn and soybeans.
“We grow about 2,000 acres of each,” he said. “We do grow a little bit of wheat from time to time, we had just about a couple 100 acres of wheat out this year. And then we have a real small operation of some cows.”
It’s for good reason; the crops are easy to work with and they’re some of the most thoroughly researched and understood agricultural products out there. They also have many applications.
But corn and soybeans have had into some issues as of late. And farmers around the state are feeling the financial strain.
“Not only are we battling the low market prices, where we're selling our product for way less than what it takes to grow them, but we're also having to pay more on the other side to just to get the crop grown,” he said. “It's really been a challenge.”
Dwight Ludwig, a farmer out of Cory, Indiana. (Max Rebolledo/WTIU)
The average selling price of corn and soybeans have hit a recent low. In 2022, corn sold for $7.20 per bushel and soybeans for $15.70 per bushel. This year, corn averaged $4.35 per bushel and soybeans $11.50 per bushel, according to the USDAs National Agricultural Statistics Service.
This, on top of already thin margins brought on by high input costs like pesticides and fungicide, have made it a challenge for farms to operate.
“With the market being where it is, you might put off any sort of capital improvements to your farm,” Ludwig said. We’ll kind of put a pause on anything like that, and really just basically try to survive and make it through until the market improves.”
Heavy rains and fair weather have had a somewhat negative effect this year as well. Moisture helps crops grow, but in high levels can bring some concerns.
“With moisture comes a lot of bacteria, fungus, insects, things like that,” he said. “So not only are we struggling to break even, but you’ve got to throw more at it, more inputs at it, just to get the crop to where it needs to be so you can harvest it.”
Last year, farmers contended with the exact opposite problem. Widespread drought conditions led to more breakage in the crop, but according to Todd Davis, the Indiana Farm Bureau’s Chief Economist, higher prices at around $6.80 per bushel of corn made it a profitable year for those with fields that survived the heat.
“About 60% of the corn and soybean area last year was impacted by drought,” he said. “This year, that same group pegged that at about 10%. Big difference.”
There are a lot of other factors at play in the low prices effecting farmers. South America recently made huge strides in entering the global ag market by way of investing in technology and infrastructure upgrades. This caused an increase in worldwide supply and a decrease in demand.
“As those investments get made in South America, they're going to be a lot more competitive price-wise in the rural market, so it is really a bonafide concern,” Davis said.
And as land rents and taxes continue to increase each year, farmers must still pay all the other bills that come from running a farm.
“Not only are they covering inputs in land, right,” Davis said. “You have to pay the banker on machinery, and you have to pay overhead, and you also need to provide resources for the family. And so those margins are all getting tighter.”
Davis said though that consumers are unlikely to experience price changes at the grocery store from all these issues facing farmers in the immediate future. Most of today’s corn and soybeans become syrups for processed food, ethanol, or feed for livestock.
If consumers see any price changes, it’ll be on the price of meat.
“Cheaper feed will help reduce some of that price in any case,” he said.
Farmers’ struggles are on the USDAs radar; on Tuesday, the House Ag Committee held a hearing titled, ‘Financial Conditions in Farm Country.’ In it, officials said that farmers nationwide could see a drop of nearly 25 percent in farm income compared to next year.
Tony Hotchkiss, the Chairman of the Agricultural and Rural Bankers Committee said bankers are also growing concerned.
“With rising input costs and lower commodity prices, farmers and ranchers have worked through their liquidity and working capital they’ve built up over the past few years at a more rapid pace than anticipated and are now beginning to leverage equity through refinancing debt,” he said. “This has made agricultural bankers feel like they are looking over the cliff in regards to the agricultural economy.”
(Courtesy of the USDAs National Agricultural Statistics Service)
So, what can be done to help the ag economy? Officials and farmers like Dr. Dana Allen-Tully, the president of the Minnesota Corn Growers Association agree — Congress needs to pass a new Farm Bill.
“I think that the Farm Bill focuses on the farm and nutrition title, but in reality, the Farm Bill is really a rural community bill,” she said. “And so, there's a lot of titles in the Farm Bill that will help support our communities.”
The Farm Bill, which must be updated every five years, mainly serves as a food assistance bill for the majority of Americans. Ludwig said it also props up farmers to be able to handle whatever mother nature or the markets throw at them.
“Getting the Farm Bill passed with support for crop insurance is always huge,” he said. “When we get in bad years and have droughts and something like that, we’ve got to have support and keep crop insurance funded so these farmers can survive through those bad years.”
The House of Representatives passed a version of the Farm Bill back in May. The Senate has yet to do the same. Congress must sign a new bill by Sept. 30 or the previous version will extend into 2025, which would mark the second time the 2018 Farm Bill has been extended.
