Economic Perspective: Income Challenges on the Farm
“Today’s program looks at income challenges on the farm. Mike, with less than two percent of workers employed as farmers most of us aren’t aware of the frequent ups and downs of farm income. Where are we today in this income cycle? Are farmers smiling or frowning?”
“First of all I want to put a plug in for those two percent of our workers. I mean, they feed us, and they feed a lot of the world. So it’s amazing what a small number of people in the farming community can do in terms of their output and production.”
“Farmers have always faced challenging economic environments. One is based on the weather; it could be too hot, too cold, not enough rain, too much rain. So that’s always there. Second challenge is international competition. Farming is really now an international business, and so as a consequence we see big swings in farm income. It can be good on year. It can be bad another year, and unfortunately over the last five years it’s been somewhat bad.”
“Farming income has been coming down. It’s ironic that this is primarily due to the fact that supply of farming output worldwide is good. It’s high, and when you have that you have lower prices. So farmers are really facing a challenge right now in terms of dealing with these low prices. That motivates them of course to become more efficient, and one of hte things that farmers are looking forward to right now is the federal government is currently renegotiating it’s farm programs.”
“We do this about every five or six years, and farm programs have been very, very important for farmers to give them a leveled income that they can rely upon. That’s now up for grabs so this is going to be very, very importkant for the farming community to watch in the coming months, what happens with those federal farm support programs.”
Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.