With farmers coming off a third straight year of lower incomes, 2017 may require more belt-tightening for many.
Persistently low prices for major commodity crops including corn and soybeans may inch up slightly in the New Year. But farmers may find they still need to adjust their strategies to ride out the slump.
"There's much more of an emphasis on just getting by, making it to break-even, making sure that our business cash flows," says Chad Hart, an Iowa State University economist. "For a baseball analogy, we're trying to hit a bunch of singles now rather than swinging for the fences and the home runs."
Hart says for some Corn Belt farmers that may mean tipping to slightly more soybeans, which have a somewhat more favorable outlook for the coming year. For others, it could affect what seeds they choose to plant or their fertilizer application decisions. Hart says good years as recently as 2012 and 2013 likely gave most farmers enough capital to make it through.
For the state as a whole, Hart says, the downturn in the farm economic has an impact, but not a devastating one.
"When you look at the other industries that are in Iowa, they're actually doing fairly well right now," Hart says, "especially in comparison to agriculture. And they're helping hold up, if you will, the economic activity throughout the state."
As evidence, Hart points to the fact that the Revenue Estimating Committee reduced the state’s overall budget but not by as much as the farm economy has fallen.