American farming is having a tough time. Crop prices are going down, and the cost of borrowing money is going up. Ernie Goss, an economist from a Nebraska university, warns farmers to prepare for these changes.
Banks are becoming more cautious about lending money for farming. At the same time, farmers are spending a lot of their money on necessary items like seeds and fertilizers. This situation is making farmers reconsider buying more land.
The USDA, a big group that manages farming in the U.S., predicts farmers will earn less money in 2023. This is different from the recent trend where farmers were making more money. They also expect crop prices to fall. Even with these challenges, the economy in farming-heavy areas like the Midwest and Great Plains is still growing, just slower than before.
Paul Schadegg from a company called Farmers National Company mentions that the value of land is not going up as fast as it used to, partly because it's getting more expensive to borrow money. However, this slower increase might help new farmers, even if it's harder to borrow money because of potential higher interest rates.
Wade Simpson, a money expert, tells farmers to get ready for these changes by knowing exactly how much money they can spend, ensuring they have the right amount of insurance for their crops, and not borrowing too much money. This advice is crucial since the weather is becoming less predictable due to climate change.
Iowa's Republican Rep. Randy Feenstra is working on a potential solution to make insurance for crops cheaper for new farmers. This solution is part of a proposed law, the Crop Insurance for Future Farmers Act, also backed by Minnesota Democrat Rep. Angie Craig. The goal of this law is to help all farmers handle these money challenges.
Source : wisconsinagconnection