I think it’s worth highlighting the tale of two cities that you only lightly reference. Grain producers, which are about 270M acres and 320k farms, are getting hit hard by commodity prices relative to input costs, and are on average operating below cost of production right now. The rest of the farm sector is faring much better, some only slightly down and others up.
It's true that the aggregate hides the difference between those having a good year and those having a bad year. Hope to dig into that in a future post.
Where do interest payments appear? If net farm income excludes interest payments, relatively high asset values (with given debt/asset %) and relatively high interest rates can turn an ok income into an unattractive cash surplus.
Great post with a necessary perspective.
I think it’s worth highlighting the tale of two cities that you only lightly reference. Grain producers, which are about 270M acres and 320k farms, are getting hit hard by commodity prices relative to input costs, and are on average operating below cost of production right now. The rest of the farm sector is faring much better, some only slightly down and others up.
It's true that the aggregate hides the difference between those having a good year and those having a bad year. Hope to dig into that in a future post.
Where do interest payments appear? If net farm income excludes interest payments, relatively high asset values (with given debt/asset %) and relatively high interest rates can turn an ok income into an unattractive cash surplus.
Net farm income is measured after interest payments. Total interest payments up about $10b since 2021.