To be honest, I don't really know how to start this post. So, I guess I will just come right out and say it. Times are tough and only getting tougher for farm income. This is by no means a pleasant topic, but one that needs to be discussed. Recently the United States Department of Agriculture suggested that things will get worse before they get better. According to a study by USDA's Economic Research Service, farm income could potentially drop to its lowest total since 2002, a 56% decline from its recent high in 2013. Despite the grim forecast, I encourage you not to panic. There are things you can do to mitigate the loss of income on your farm today and going forward.
Evaluate Your Expenses
With income on the decline, farmers are paying special attention to expenses on the farm. It is important to evaluate your practices and be prepared to make some difficult decisions. That may include looking at the costs of seed, feed, fertilizer, and other expenses. It will also be important to have a close relationship with your crop insurance agent. During these times your agent can help you understand what policies are essential and where you can cut costs to be the most efficient producer you can be.
Diversify Your Farm
Diversification is a great tool for producers trying to weather the financial storm. There are many ways by which one can diversify his/her operation. It could simply mean adding a new variety of crops in your planting rotation. To others it could be adding cattle to your operation. It could mean looking at ways of generating income outside of the traditional practices of farming and ranching. Any added income that you can generate during these hard times will help lessen the impact of a down farm economy.
Promote Value Added Opportunities
As producers, you should always promote and support value added opportunities. South Dakota Farmers Union is a member of South Dakota Value Added Agriculture because we believe in the benefits of value added operations. The production of ethanol is considered as a value added operation. Can you imagine where we would be today without ethanol? Value added operations allow producers to market their commodities right here at home. When we consume more products here at home it equates to more money that you save by avoiding the added expense of a basis.
Pay Attention To Farm Bill Programs
I know you have already enrolled in the programs included in the 2014 Farm Bill. However, it is important that you still pay attention to the discussion around all of the programs, even the ones you are not enrolled in. Why? Well one reason is that even now adjustments are being made to address current issues with these programs. Producers who have operations in multiple counties are being given a one-time opportunity to make adjustments as to which county they will be enrolled in. You also should pay attention because preparations for the next Farm Bill are already beginning. In order for it to best serve your needs, we need feedback on what's working at what isn't.
Unfortunately there is not a one size fits all solution to the impacts of a down farm economy. What works for you neighbor might not work for you. However, there are options like those listed above that can reduce that burden on your farm. South Dakota Farmers Union will continue to work alongside you to help our farm economy bounce back and to protect the family farm.