Liquidity Remains a Concern on Iowa Farms

Jun 29, 2020

By Alejandro Plastina

Despite a higher average income in 2019, Iowa’s mid- to large-size farms actually saw a considerable decrease in farm liquidity and working capital over the past year.

Data from the Iowa Farm Business Association, collected from 401 farms, shows net farm income in 2019 at an average of $77,946 per farm. But that number only tells part of the story, according to Alejandro Plastina, assistant professor and extension economist at Iowa State University.

“A higher average income in 2019 did not translate into an overall improvement in financial liquidity for Iowa farms,” Plastina said. “Not only was the share of farms with vulnerable liquidity larger in December 2019 compared to a year earlier, but their working capital needs were also higher.”

Plastina gives an overview of the Iowa farm liquidity situation in the June edition of Ag Decision Maker, in a featured article called “Mixed liquidity results for Iowa farms in 2019.”

The share of farms with negative working capital increased almost uninterruptedly from 10% in December 2014, to 17% in 2019, while the share of farms with working capital below $250 per acre increased from 23% to 34% over the same period.

Plastina said the liquidity for some farmers is actually improving, but many others are seeing a decline. According to the report, the bottom third of farms (ranked according to annual return to management) have consistently averaged negative accrued net farm income levels since 2015, while the top third has consistently averaged incomes more than twice the state average.

Plastina said farms may be able to sustain a loss in liquidity for a while, but when it occurs year after year, the challenges become more pressing.

“We are concerned with those who are struggling or short on liquidity,” he said. “That means that if anything goes wrong or they don’t get a loan or something to generate more cash, they might need to liquidate some assets or make adjustments to their long-term plan.”

The report explains how liquidity is calculated and offers useful insight and comparisons dating back to 2012.

Original photo: Spring planting.

Source : iastate.edu

Video: Dicamba Returns for Georgia Farmers: What the New EPA Ruling Means for Cotton Growers

After being unavailable in 2024 due to registration issues, dicamba products are returning for Georgia farmers this growing season — but under strict new conditions.

In this report from Tifton, Extension Weed Specialist Stanley Culpepper explains the updated EPA ruling, including new application limits, mandatory training requirements, and the need for a restricted use pesticide license. Among the key changes: a cap of two ½-pound applications per year and the required use of an approved volatility reduction agent with every application.

For Georgia cotton producers, the ruling is significant. According to Taylor Sills with the Georgia Cotton Commission, the vast majority of cotton planted in the state carries the dicamba-tolerant trait — meaning farmers had been paying for technology they couldn’t use.

While environmental groups have expressed concerns over spray drift, Georgia growers have reduced off-target pesticide movement by more than 91% over the past decade. Still, this two-year registration period will come with increased scrutiny, making stewardship and compliance more important than ever.