Senator Says Some Farms Hurting But No Crisis
As farmers put their 2016 crops in the ground, they face another year of corn and soybean prices that will make turning a profit on the land challenging. Sen. Chuck Grassley (R-Iowa) says already he's seeing early signs of strain in the farm economy.
"We're hearing a little bit from bankers," he said. "We're hearing isolated instances of farmers [hurting]. We're hearing that the 800 number where farmers that are in trouble can call in and ask for help or get advice that they're getting a few more calls now."
Grassley says the biggest problem is farmland rental rates that remain stubbornly high, despite crop prices that have fallen from 2012 peaks. But he adds that the situation is far more stable than the recession that led to the 1980s farm crisis. Back then, he says, farmers only owned 25 percent of the land they worked. Now, fewer acres are mortgaged and they're renting a lot less.
"Today about 75 percent of the land is paid for, so you aren't reading about people losing their farmland," Grassley said. "But if they're paying high cash rent and they can't pay the cash rent, then in a sense they're losing at least part of their farming operation."
Grassley says some banks are requiring land as collateral now for operating loans and bankers have seen farmers give up rented land they've had for years. But most expect cases of real hardship to be isolated because many farmers put money away in the good years to carry them through the tougher times they knew would come.