Big Harvest Wraps Up, But Farm Economy Still Struggling

Source: By Amy Mayer, Iowa Public Radio • Posted: Tuesday, November 21, 2017

Oversupply of corn and soybeans from huge harvests drives down their prices.

Now that Iowa farmers have most of their corn and soybeans out of the field and into the bins, the numbers suggest another great year for production… and another down year for prices.

Since 2014, the farm economy has been in a downturn, says Iowa State University extension economist Chad Hart. But he says most farms are muddling through.

“In any given year, you always see a few farmers have to exit the business,” Hart says. “Over the past 3-4 years, we’ve watched that pace tick up a little bit. It will likely accelerate a little more as we look forward over the next year. But it’s not a very large wave right now.”

Individual farmers will continue to produce as much as they can, but he says it’s likely a drought or other weather event that hurts production in some areas will eventually help push prices back up.

Meanwhile, Hart says when farmers make less money, the state has less revenue to spend.

“With the farm economy in a downturn, that has translated into smaller tax revenues coming from the ag sector to the state of Iowa,” he says, “and as I look out into 2017-2018, I look for that to continue.”