Record-breaking yields, barely breaking even

Some of the best yields we’ve ever seen. It’s been uttered time after time by producers in MFA territory this fall as their combines churn through prolific grain fields under mostly rain-free skies. USDA yield estimates confirm that observation. Missouri corn is forecast to average 185 bushels per acre, just shy of the 2014 record of 186 bushels, and statewide soybean yield could set a new all-time high if the projection of 51 bushels per acre is realized.

But the thrill of producing high-yielding crops is dampened by depressingly low prices for most commodities. As a result, U.S. net farm income is expected to continue its steep decline into 2025. Several farmers I’ve talked with lately said it is taking these record-breaking yields just to break even.

In September, the Purdue University/CME Group Ag Economy Barometer recorded its lowest readings of farmer sentiment since March 2016, when the U.S. farm economy was in the early stages of an economic downturn. The latest survey showed that farmers are increasingly worried about commodity prices, input costs, agricultural trade prospects and the potential impact of the upcoming election. 

When asked to identify their top concerns for the coming year, 34% of farmers cited high input costs and 33% pointed to low commodity prices. Additionally, 78% of producers expressed concern that government policy changes following the 2024 elections could impact their farms. Interest rates no longer top the list, the survey found.

For farmers with diversified operations, the picture is a little brighter. Livestock production, as a whole, is forecast to do well in 2024. The USDA reports that cattle and calves should make 4% more than last year, totaling $4 billion, the fourth consecutive year that sector will increase. Prices for dairy, broilers, hogs and eggs are also projected to increase this year.

In an uncertain environment, producers have to prepare for tighter margins and the impact of lower farm income on their operations. Proactive strategies could include diversifying income sources, finding savings without sacrificing quality, carefully evaluating any large investments, and operating more efficiently to reduce expenses. With interest rates expected to drop, now might also be a good time to review farm debt. Refinancing high-interest loans could lower monthly payments and improve cash flow. 

“In an uncertain environment, producers have to prepare for tighter margins and the impact of lower farm income on their operations.”

As a farmer-owned cooperative, MFA often feels the impact of such a downturn more acutely than other agribusinesses. It’s personal to us. You can rest assured that we’re continually looking for ways to increase our own savings and efficiencies while providing products, programs and promotions that can help our customers stay as profitable as possible during tough times. It may mean more precisely applying nutrients through variable-rate application, choosing seed that will perform best in your field, finding the right input financing options, ensuring weeds don’t rob your crop’s potential or countless other ways MFA can support you and your operation. 

It’s been said many times but is especially relevant today: MFA succeeds only when our customers succeed. Ask us how we can help. 

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