Tough year ahead for ag

Record crops, low commodity prices and stalled trade negotiations spell difficult times for Kansas farmers and ranchers in 2016.

That’s the consensus of many ag producers throughout the Sunflower State. After many producers harvested one of the best wheat crop in years, farmers felt good. That’s when the reality of low sale prices for this commodity set in.

Like many other small businesses, inputs to produce a bumper crop generally entails an abundance of input costs as well. Except for lower fuel prices, most agricultural inputs remain high and continue to rise.

Drive through rural communities, especially in the western half of Kansas, and you’ll see huge, long piles of wheat lying on the ground. Talk to farmers and ranchers and they’ll tell you their near-term economic prospects don’t look good.

While fall row-crop harvest has recently begun, there’s a huge shortage of storage space for the expected bumper crops of corn and milo. During the next few weeks, Mother Nature will decide whether the bean crop will be a good one.

This winter could be tough, if prices don’t improve. Farmers don’t have money now.

What some do have is debt and payments on high-priced machinery, trucks and land. I stopped through one northwestern Kansas county and visited with one farmer who told me at least six land sales occurred in the last month or so. And while the price of land has leveled off, or in most cases dropped from record high prices, no one is buying this precious resource.

Most will tell you they can’t afford it. Others say low commodity prices have tied their hands or they’re moving into a survival mode. Making ends meet, they say.

So what’s the answer?

Higher commodity prices would help solve the problem in farm country. But most farmers, ranchers and economists don’t see this happening any time soon.

Improvement in international trade could also make a difference.

For Kansas farmers and ranchers to survive and prosper, they have to sell the products they produce. They must be able to export their wheat, corn, soybeans and livestock products.

Exports account for almost 25 percent of U.S. farm receipts. The current Trans-Pacific Partnership trade agreement would provide new markets for U.S. farm products. It could also increase net farm income by $4.4 billion and ag exports by $5.3 billion. This trade agreement could also result in an estimated increase of 40,000 jobs.

In spite of stalled trade negotiations and low commodity prices farmers and ranchers receive for their crops and livestock, most remain hopeful and look forward to better times in the future. They’ll continue to rein in their spending while cutting costs wherever they can. Their livelihood depends on a vibrant, healthy agricultural economy bolstered by international trade and a kind Mother Nature.

John Schlageck is a leading commentator on agriculture and rural Kansas.

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