While short-term profitability woes continue to plague American farmers, a Farm Futures survey shows greater optimism for 2020.
Sixty-eight percent of farmers who responded to the survey said they expect the next 20 years to be profitable for agriculture, which is a 2 percent gain from a year ago.
Fewer farmers worried about losing rental ground due to high cash rent prices. Less than 12 percent predicted losing farms in 2020 because landlords were unwilling to lower rental prices, down by 5 percent compared to last year.
Even fewer growers are considering cashing out farmland equity to make ends meet this year—10.3 percent of respondents are considering liquidating farmland, compared to 11.7 percent last year.
“Farmers are slightly optimistic about commodity prices after direct farm program payments supplemented farm profitability last year,” says Farm Futures market analyst Jacqueline Holland.
Farmer optimism for overall financing conditions also improved during the year. A reported 13 percent of farmers expected to have troubles obtaining operating financing in 2020, down by 3.4 percent from the 2019 survey. The percentage of growers who expect oversight from their lenders this year also improved by 5 percentage points.
“Low interest rates will help ease farm expenses in 2020, despite tightening repayment capacity throughout the agricultural production sector,” Holland said. “Farmland value stability has been the saving grace of farmers seeking ag credit, indicating strong long-term prospects for the farm economy amidst an ongoing downturn over the past five years.”
The nationwide survey of 728 responses was collected by email during the final week of January.
Source: Farm Progress