Iowa farmers to curb expenses as farm income drops
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, April 16, 2014 - For the second year in a row, Iowa soybean farmers expect to see a decline in financial returns and will cut back expenses according to the Agri-Pulse Farm Opinion Poll. The poll was conducted this month in partnership with the Iowa Soybean Association (ISA).
Nearly three out of four farmers (73 percent) participating in this year's poll expect their farm financial outlook to worsen in 2015 - with more than 53 percent expecting it to worsen “slightly” while almost 20 percent think it will worsen “a great deal.”
This outlook is a little less gloomy than in last year's poll, when 80 percent of poll respondents thought the outlook would get worse.
“The simple truth is margins are going to be tighter this year,” says ISA President Tom Oswald of Cleghorn, Iowa. “This poll confirms what farmers, ag manufacturers and biotech organizations have already been feeling.”
-- Seventy-seven percent of poll respondents also expect farmland values to decline in 2015, up slightly from 75 percent in 2014.
-- About the same percentage of farmers as last year said they plan to purchase more or continue to carry about the same level of crop insurance this year (86 percent in 2015 compared to 87 percent in 2014).
-- Almost 54 percent said they'd cut back on equipment expenses compared to 58 percent last year. One-third of respondents will reduce fertilizer expenses while 15 percent said they would scale back on purchases of crop chemicals.
-- Twenty-three percent of farmers will cut back on seed expenses compared to 8 percent a year ago.
Agri-Pulse Editor Sara Wyant said the sentiment echoes the anticipated decline in this year's net farm income. The U.S. Department of Agriculture forecasts it to drop 32 percent - from $108 billion in 2014 to $73.6 billion this year. If true, 2015 net farm income would be the lowest since 2009 and a drop of nearly 43 percent from the record high of $129 billion in 2013.
But Wyant says that's also why farmers, who understand the cyclical nature of their business, have been keenly interested in establishing a supportive farm safety net in the 2014 farm bill.
Iowa farmers overwhelmingly (83 percent) said they selected county-level Agricultural Risk Coverage (ARC) as their farm program of choice for the life of the new farm bill, with about seven percent selecting individual ARC and three percent selecting the Price Loss Coverage option.
Other poll findings:
-- 61 percent of respondents believe cash rent values will stay about the same.
-- 50 percent expect to spend about the same on farm input expenses, while about 43 percent think they'll spend less than before.
-- One-third said that of several national issues, maintaining the Renewable Fuel Standard is most important to the future profitability of their farms.
-- 19 percent of respondents expressed concerns about regulatory burdens.
-- 50 percent support Trade Promotion Authority (TPA) to provide President Barack Obama with fast-track negotiating authority on future trade agreements
The poll was taken April 5 with 112 Iowa farmers responding to the unaided 11-question poll.
About the Agri-Pulse Farm Opinion Poll: The ISA and Agri-Pulse launched the Agri-Pulse Farm Opinion Poll in 2014 to help farmers amplify their voice by collecting opinions and circulating the results. The survey is conducted four times annually and captures perspective and opinions on such topics as key legislative and regulatory issues, crop conditions, planting and harvesting progress, yield estimates and other timely issues impacting farmer profitability.
About Agri-Pulse: Agri-Pulse is the most trusted farm and rural policy source in Washington, D.C., providing a balanced perspective on a wide variety of issues including the farm bill, nutrition, trade, food safety, environment, biotechnology, organic, conservation and crop insurance.
About Iowa Soybean Association: The ISA (www.iasoybeans.com) develops policies and programs that help farmers expand profit opportunities while promoting environmentally sensitive production using the soybean checkoff and other resources. The association is made up of nearly 11,000 farmer members and is governed by an elected volunteer board of 21 farmers.
Not funded by the soybean checkoff
For more news, visit www.agri-pulse.com.