Down on the Farm
by David on September 1st, 2009
Last week my wife and I took a leisurely drive through Wisconsin to visit our son in Minneapolis. 
We avoided I-94, taking mostly state and US highways. We saw lots of cows and even more corn. It seemed an idyllic rural scene. But all is not well in farm country. Our hostess at a bed & breakfast in Reedsburg told of the woes of two recent guests. “We had two young women who just graduated as large-animal vets. It used to be that farm veterinarians could write their own tickets, but not anymore. They both were desperate to get jobs here. And dairy farmers are struggling too. I know one farmer who is borrowing $40,000 a month to stay afloat.”
The US Department of Agriculture confirms these on-the-ground observations. In a just-published report, the USDA projects 2009 farm profits will be 38% lower than last year. In dollar terms, income is projected to be $54 billion, compared to $87 billion in 2008.
The chart at left shows that total farm income will fall below its 10- year average. The culprit is falling prices caused by slack domestic and global demand. The recession strikes again. And, as we learned in Wisconsin, dairy has been particularly hard hit. Income from dairy products is expected to drop from $34.8 billion in 2008 to $23 billion this year. Many dairy farmers are being forced to cull their herds to reduce costs.
But the most interesting statistics I found digging through the USDA report, can be seen in the second chart: The average farm-owning family earns less than $6,000 a year from farming. According to the USDA, “In 2009, average family farm household income is forecast to be $75,895, down 5.2% from 2008, and 8% below the five-year average of 2004-08. In 2009, the average family farm is forecast to receive 7.6 percent of its household income from farm sources, with the rest from earned and unearned off-farm income.” Amazing!
Tags: community development, economic predictors, financial crisis, green banking, ShoreBank, triple bottom line
