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Tough times and tumbling prices test Midwestern farmers

July 4, 2017 at 6:30 PM EDT
Farmers in the Midwest are facing yet another lean financial forecast. A few years ago, high prices for crops like corn and soybeans translated to more income, but now those prices have tumbled, leaving farmers in a ditch. Special correspondent Jack Williams from NET in Nebraska reports on how producers are adjusting to the new reality.
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WILLIAM BRANGHAM: But first: It is growing season for farmers across the Midwest, and many are faced with yet another tough financial forecast, as corn and soybean prices remain low, which means less money in farmers’ pockets.

In Nebraska, some producers are now coming to grips with what some say is this new reality.

From NET in Nebraska, Jack Williams reports.

CARL SOUCEK, Corn and Soybean Farmer, Prague, Nebraska: This is our little office that we use as kind of a break room. This is the center where we can on the computer or order parts or things like that.

JACK WILLIAMS: On a family farm in Prague, Nebraska, about 40 miles north of Lincoln, Carl Soucek is right at home. His family has been farming this land since the late 1940s. They grow mostly corn and soybeans, but the last couple of years haven’t been easy.

High prices for crops translated to more income for farmers a few years ago, but now those prices have tumbled, leaving farmers in a financial ditch.

CARL SOUCEK: The best thing that ever happened to the corn industry was $7 corn, and the worst thing to happen to it was $7 corn, because it kind of threw everything out of balance. And I think we will see the cycle come back. I don’t know when it’s going to come back.

JACK WILLIAMS: While he waits, Soucek is doing what he can to cut costs on the farm. Instead of taking his equipment to the local implement dealer for repairs, he has parts delivered to the farm and does those repairs himself.

How much money does that save you, doing your own repairs? If you had to take your tractor in yourself, how much would that cost you, compared to you actually doing this yourself?

CARL SOUCEK: Shop rates can run anywhere from $75 to $150 an hour. And service calls, if they come out from the dealership to work on a piece of equipment, service calls could be another $250 on top of that.

So, if it’s something we can take care of ourselves, every time we do that, we’re saving a little bit of money.

JACK WILLIAMS: Soucek doesn’t apologize for enjoying the good times a few years ago. He says farming isn’t always easy, and when prices of crops such as corn and soybeans shot up, many farmers’ earnings increased, and they enjoyed a higher standard of living.

It was a lot different than the days when they had to watch every penny they spent.

CARL SOUCEK: If we need to go back to that, we will. And I think we have already. We’re careful about our family living, and been there, done that, and we will do it again if we need to tighten our belt that much.

JACK WILLIAMS: At a recent economic workshop in Lincoln, farmers and ranchers got a dose of economic reality. With falling prices of corn, soybeans and wheat bringing farmers less income, many are facing more debt, tighter margins and an uncertain future.

They’re looking for guidance as they try to navigate through the down times without too much damage.

JAY PARSONS, University of Nebraska-Lincoln: They have seen the good times, they have seen the bad times. They know nothing lasts forever. And they keep track of things and they monitor things and they’re aware of things. But there’s probably a decent number of people out there that haven’t had that perspective and are still trying to adjust to the new situation.

JACK WILLIAMS: Economic factors, such as high land costs and skyrocketing property taxes, are testing the resolve of some Midwest producers. But that might actually be a good thing for their long-term financial health.

TINA BARRETT, Director, Nebraska Farm Business, Inc.: Tough times make better managers. And if I think about the producers I work with, those who had tough times in the ’80s are great managers today, because they had to learn how to make those tough choices, they had to learn how to manage their business like a business, and they continued to do that through the profitable times and made a lot of money through that.

JACK WILLIAMS: Dave Nielsen is a third-generation farmer in Lancaster County in Eastern Nebraska, where he grows corn and soybeans on about 2,000 acres.

His father and grandfather worked this ground before him, so he’s seen the good and bad times. He says the younger farmers who got into the business a few years ago when prices were high are the ones who feel the downturn the most.

DAVE NIELSEN, Corn and Soybean Farmer, Lancaster County, Nebraska: It was really tough on young guys starting then. Young guys starting in those glory years, wow, this is easy. There was a lot of youth that came back to the farm, maybe left jobs in town and came back to the family farm, to the farm. And, you know, now it’s a whole different ball game. Now it’s, you really have to watch what you’re spending on inputs and family living and that.

JACK WILLIAMS: Nielsen probably won’t lime his soil this year and, like Carl Soucek in Prague, he’s doing a lot of his own repairs to save money. And he’s taking a hard look at the rest of his expenses.

DAVE NIELSEN: Every good operation should, even in the good times. Really, you should. You probably — just a little sharper pen or a little sharper pencil when you’re in the downturn.

JACK WILLIAMS: For the PBS NewsHour, I’m Jack Williams in Lincoln, Nebraska.

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