Are Farmers Going Broke?
Farming is one of the oldest professions in human history, and for centuries, it was quite the profitable one, too. In recent months, though, farmers in the Midwest have started filing bankruptcy in record numbers due in part to the ongoing trade war with China and other countries. Fortunately, if the troubles with trading have affected your livelihood, there are some steps you can take to save money.
Bankruptcy Rates Doubled in a Decade
Per an article from the Wall Street Journal, courts overseeing a major portion of the country’s farmland processed twice as many bankruptcies in 2018 as they did in 2008, which is a troubling sign for America’s farming industry.
- The 7th Circuit Court of Appeals, which presides over much if Illinois, Indiana, and Wisconsin, received twice as many bankruptcy filings.
- The 8th Circuit Court of Appeals, which covers Iowa, Minnesota, Missouri, Arkansas, Nebraska, and North and South Dakota reported a 96% increase in bankruptcy filings.
- The 10th Circuit Court of Appeals, including Wyoming, Utah, Colorado, Oklahoma, New Mexico, and Kansas, said they received 59% more bankruptcy filings in 2018 than it did during the height of the Great Recession.
These three courts represent states that produce more than half of all the country’s farm sales – including exported sales.
Why Are Bankruptcies on the Rise?
Numerous factors have led to the bankrupt farmers across the country, but experts believe that the ongoing trade war with China, Mexico, and other countries served as the tipping point. The Trump administration imposed tariffs on these countries, making it far less desirable for them to export their goods into the US. In return, both China and Mexico imposed retaliatory tariffs, including tariffs on American cheese and pork.
As a result of the increased tariffs, 2.5 billion pounds of meat sat in warehouses across the nation in July 2018, and the prices of other meats like beef and chicken fell drastically. Midwestern livestock farmers were already dealing with decreased profits, and once the value of meat fell, it sent many of them into bankruptcy. In fact, per the United States Department of Agriculture (USDA), farms across the country reported a median income of -$1,548. Aside from their books being in the red, farmers also drove their collective debt to $400 billion, which is the largest amount of farm debt in more than 40 years.
Cutting Costs Wherever Possible
It is clear that 2018 was a rough year for farmers in the Midwest, and 2019 isn’t looking much better with tariffs still in place. Fortunately, there are several things farmers can do to help cut costs where possible, such as reducing their irrigation cycles and water consumption. Irrigation is a tremendous expense for farmers, but there are ways to cut the costs significantly. One such method involves using soil amendments designed to retain water and release it to crops as it is needed. These amendments can be added to your existing injection system, making application a breeze. Numerous case studies have shown that quality amendments drastically slow soil drying and increases time between irrigation cycles.
Farmers across the Midwest are struggling due to many different things, and even if the current trade issues aren’t the direct cause, they are certainly making things even more difficult. If you are being affected and looking to cut costs wherever you can, AquiMax soil amendment technology is a great way to do just that.