Doug Barrie cuts a wheat, near Ucon, Idaho. Jake Putnam photo
Recession Hits the Farm, Cutting into Profits
Ucon--The U.S. Department of Agriculture reports that U.S. farm profits will fall 38% this year, a clear sign that the nation's slowing economy has hit the heartland. The economic malaise first hit the nation's urban centers with declining property values then the suburbs and now the farm.
The USDA says farm income will drop $54 billion in 2009 down $32.2 billion from last year's record high net farm income of $87.2 billion. The drop in farm prices could lead to a slow spike in in food costs according to economists.
For farmers like Doug Barrie of Ucon the news combined with a flat wheat market is not great news. "Market prices, well, looking back I wish I would have contracted early. It was in the 5-dollar to $5.20 range for soft white. I was hoping for $5.50, but missed that boat.
Barrie talked to his marketing consultant who quoted prices just above the $4-dollar mark. "That's okay in our normal cost schedule, but with high fertilizer costs it really eats into our profits."