Inflation leaves America’s farmers in crisis | States of America

2022 has been a year of inflation major supply chain disruptions high gas prices and grocery prices up 11 from last year you tell yourself you know I'm an adult we'll take care of myself I have children we work every day you know people just don't make enough thank you all Americans have felt the pinch but there's a region of the country where people say they're fighting 40 inflation they're the farmers who grow our food you know we feed Europe we feed the United States every input that a farmer buys is at least 100 percent more to 140 percent more people need to understand we've got to have these Farmers we we need them they are so crucial to the whole economy you know to the United States and the world in partnership with the Indianapolis Star and reporter Sarah Bowman we traveled to the Eastern Corn Belt region of Indiana Ohio and Kentucky and USA Today reporter Charisse Jones sits down with Economist and Georgetown Professor I don't think we should be expecting to go back to the prices that we had before the war or before the pandemic [Music] I've been an environment reporter for the past five years now and I've come to appreciate just how important this region is to producing food for the world while Midwestern states are often considered flyover states roughly one-third of the world's corn and soy is grown here over the last two years like everyone Farmers have had to endure supply chain disruptions but this year they say skyrocketing costs of fertilizer and diesel fuel have made it a year like no other this Farm has been in our family over 100 years in Western Ohio about an hour from the Indiana border I meet Dave and Ann Cress Dave and his family farmed 1400 acres of corn and soy making them a small to medium-sized Family Farm given what you're facing this year with these input costs like how does it make sense to be a farmer it's really rough right now I mean the price of inputs right now are as the highest they've ever been I mean he took it Farm diesel which was two dollars and 35 cents it's now 5.76 doesn't mean much to the local person when you're buying 20 000 gallon a year that is a whole lot more money and we have to come up with it somewhere the pain compounded for Farmers earlier this year when Russia invaded Ukraine causing both the price of diesel and fertilizer to soar at the same time for crops like corn and soy Farmers need nitrogen and potash fertilizer because it helps them get high yields but both inputs are heavily produced in mined in Russia and both were impacted by sanctions because of the war in Ukraine an entire history of farming you know you you may said I'm going to cut back on potash because it's so high but never before have I had a a person tell me you know you go to the you go to buy it and they go we don't have it so it's up 142 percent that's if you have the cash to buy it right now and you can get it on your farm pretty much all our inputs are just flying off the roof the scariest part is we don't know if we can get them the price of corn and soy have a direct impact on grocery prices almost all processed foods contain one of the two crops and more than 95 percent of animal feed is made from corn or soy we feed Europe we feed the United States everything that you buy in the grocery store except ketchup that comes in a bottle that is spreadable is made from soy soy oil is Blended in with diesel fuel too soybeans feeds the Hogs feeds the cattle is the cheapest source of protein most of your Plastics are made from corn now right I mean everything that you buy this is raised on a farm so tell me a little bit more about that uncertainty that comes with farming there was years that I mean we lived on Fruity Pebbles and bologna I'm not going to lie I mean that's farming is not a guaranteed income there's nothing to say we're going to make a dollar this year one of the challenges of being a farmer is that every year there are high upfront costs that are usually financed through loans these can be amounts in the millions the way Farmers make a profit and pay back the bank is by getting a high crop yield but regardless of how much they spend on inputs the farmers have no say in the price their crops are sold for that's because prices are set by a publicly traded Commodities exchange based in Chicago we are the only industry that buys retail and sells wholesale we cannot predict what the price equivalent to be we can't tell the consumer what the price of corn is going to be right now for next year's season if I want to get the best discount on seat I have to pay the money now I won't get a return on that money 14 16 months and now they're raising and you know they're going to raise interest they're raising our taxes I mean everything that we have is going out the roof [Music] thank you 30 miles away on the eastern border of Indiana Derrick moat runs a farm supply company that sells fertilizers herbicides and seeds directly to Farmers this has been the most stressful year I've ever had in the business this year it was terrible we fought the rain before the dry weather insects but when you can't get the products at all and you need to get to the field to spray or spread that's tough there are so many inputs that go into certain herbicides is just be like cooking you can't make the cake if you don't have all the ingredients if we can't kill the weeds we need to kill that can tremendously affect their yield and when it affects your yield it affects your income the fertilizer they have cut back they said this the only way we can see where we might be able to make a profit but it's like anything else if you don't have a good foundation down for your crops you can have a problem quickly we're concerned we are really concerned uh this is not an easy industry people need to understand we got to have these Farmers we we need them they are so crucial to the whole economy you know to the United States and the world the U.S exports more food than any other country in the world and as an industry agriculture represents five percent of the American GDP but over the past 15 years the number of farms in the U.S has been steadily declining as small Family Farms find it challenging to survive as a society we're struggling with a potential of eight percent inflation and how do we pay for just our Basics with that if you've got 40 inflation in your system that's a whole nother ball game and that's that's got some Farmers very concerned so tell me why you got into Agronomy or you are an agronomist instead of a farmer well it's a really good question I actually went to college to get off the farm and I got into AG research and realized I can research how a crop grows but I get paid whether that crop makes a yield or not and I don't have to worry about balancing all the finances and the risk that does come with farming I have so much respect for all of our Farmers that are willing to take that risk you're in and year out what's made the price of fertilizer go up so much well it's a lot of different factors in it the big one was when Russia invaded Ukraine it was right about the time when a lot of that nitrogen was supposed to be shipped to the Northern Hemisphere and it led to some really really high prices that farmers if they were going to grow corn they had to have nitrogen fertilizer with these disruptions do you think that means continued higher prices in stores and restaurants I I think we're going to see some disruptions in our food supply chain for a while yet and so I think we're at least another 12 months of some disruptions in our food system crops that are grown here I mean they are ending up directly kind of on our grocery shelves and in our pantries and fridges can you can you speak a little bit more to that if you're going to buy a biscuit or a pancake mix or a cookie or a cracker that sweet that was milled in this region if you're buying tortilla chips and some of those type of things that was corn that was grown in this region and so that's going directly into the market while Chad has concerns about how this region is being affected by the fertilizer prices and shortages he says we're not in crisis territory yet [Music] there is a time in recent memory when farming was in crisis in the 1980s double-digit interest rates caused Farmers to default on their loans many of them lost their farms and some even took their own lives the 1980s were probably why I am a professor and not a farmer all the farmers in our area were floating operating loans with 18 interest we sold out of farm foreclosures there was a gentleman in my hometown that I believe was fourth generation on their Farm and and he lost it and you saw what that did to him psychologically as well we're not at the 80s yet and hopefully we don't get to those type of interest rates but when you see the inflation you see the interest rates creeping up on us in Middle production right now it's it's difficult [Music] of one of the highest high-end rates in the country behind Industries like Mining and construction and they make up just 1.4 percent of the American population foreign two strips one ground one bacon when I grew up it seemed like everybody knew what farming was everybody was related to a farmer shoot two fillets yep you guys have a great weekend most people even the ones that come to the farmer's market don't really know anything about what we do or how we do it Jim treats and his family are livestock farmers in Indiana they own 17 pastures where they raise a few hundred free roaming cattle livestock Farmers have also struggled this year high fertilizer prices have driven up the cost of corn and soy-based feed for animals and like crop Farmers they also spend a huge amount of their budget on diesel our fuel we use in in tractors for Bell and hay so there's always fuel costs there all on the hay back and unloading it last year we spent fifty thousand dollars in fuel this year because of the fuel cost we're going to be closer to a hundred thousand because of the business we're in it takes us about a year and a half to two years to recoup our money so we've got to come up with that money ahead of time most people I would think understand that you know coming up with 50 Grand is not easy you know you're pulling it from savings accounts you might be pulling it from retirement accounts but you got to make ends meet and you got to get through it so you can continue going Farmers like Jim also need hundreds of acres of land to raise animals but just as high housing prices have impacted most Americans land prices have impacted Farmers the price of land has went from you know when we could buy it for 7 500 to to nine thousand dollars an acre and now I mean if you find land in Hampton County for under fifteen thousand an acre you're pretty lucky the average age of the American Farmer is 57 and the farmers we spoke with said they were concerned about a lack of young Farmers entering the profession is an important goal for you to be able to pass this on to your sons and be able to have them continue on definitely one of the main reasons I really got back into it was because my kids liked it because they liked it we were able to grow it and stay just us as a family running everything doing everything you know I know Ty is going to end up taking it over one day probably when I'm 90 or 100 but it's hard to give up reins before that 75 miles away the crest family is getting ready for one of the biggest events of the year the Dark County Fair foreign [Music] my friends they like stay up later and stuff where as me and my family we all go to bed at 10 because we get up at like six or seven every day to get stuff done Webb and Tyler are the sons of Anne and Dave Cress their family primarily Farms grain but they also have 10 cattle that they've raised to sell at this year's Fair I know we'll always need agriculture I'm just worried it's all going to go to those large big production Farms that have hundreds of millions of Acres I'm worried that they're gonna start cutting out the little guys what are some of the concerns or worries you have about being able to be a farmer trying to compete for land right now a bunch of lands trying to get developed or you got solar Farms trying to come in and upbid everyone else on their land rent I've been looking at getting some ground myself but it's hard to justify the numbers you don't want to overpay for something and regret it in the long run I would love to bring my sons into this operation the barrier to entry the cost is so huge now that you know we we can't bring them in what is that like for you to not know if you'll be able to pass it on to them it's horrible me and her sacrificed for 25 years everything we did I mean we didn't go on vacations we didn't do anything do I want my sons in this yes do I think the amount of stress and the pressure do I want them going through that I'm not sure I am one of the five youngest farmers in Miami County and I'm 52. most Farm family sons are not wanting to do this they're leaving and when that leaves that knowledge is gone forever what would you want the public to know about you know what you're experiencing right now no one ever says man do you realize that guy you're talking to today feeds over 300 000 people a year with the products that he that he makes no one looks at us that way I mean I would just like to be looked at that people say hey we need them [Music] aging on and Farmers say they're worried that night even worse we're going to make it through this that's just just the way the farmers are we will know we will make it through it somehow some way if we got to sacrifice we sacrifice that's just how it is I mean if it's 14 16 hours a day whatever it takes we'll get it done but it just feels like we could use a little help right now foreign [Music]

Channel: USA TODAY

Views: 34,132

Keywords: usa today, usa today news, farm, farming, agriculture, inflation, recession, farming recession, agricultural crisis, food crisis, ukraine crisis, food costs, supply chain, food crisis in america, food crisis in usa, food costs rising, supply chain issues, supply chain crisis, inflation explained, inflation economics, inflation news, farming in america, us farming, states of america, us agriculture, american farmers, us farmers, american farming, farming in usa, farm in usa

Id: Mri7Rpw4jro

Length: 16min 42sec (1002 seconds)

Published: Fri Sep 30 2022