The Average U.S. Farm Is $1,300,000 In Debt, And Now The Worst Farming Crisis In Modern History Is Upon Us

| Educate!

Above Photo: From Endoftheamericandream.com

We haven’t seen anything like this since the Great Depression of the 1930s.  Leading up to this year, farm incomes had been trending lower for most of the past decade, and meanwhile farm debt levels have been absolutely exploding.  So U.S. farmers were desperate for a really good year, but instead 2019 has been a total disaster.  As I have been carefully documenting, due to endless rain and catastrophic flooding millions of acres of prime farmland didn’t get planted at all this year, and the yields on tens of millions of other acres are expected to be way, way below normal.  As a result, we are facing the worst farming crisis in modern American history, and this comes at a time when U.S. farms are drowning in more debt than ever before.  In fact, the latest numbers that we have show that the average U.S. farm is 1.3 million dollars in debt

Debt-to-asset ratios are seeing the same squeeze, with more farms moving into a ratio exceeding 80%. Barrett notes each year since 2009 has seen an increase in the average amount of total debt among farmers, and 2017 was no exception. Average debt rose 10% to $1.3 million. The biggest increase was in long-term debt, such as land.

Farming in the 21st century has become an extraordinarily risky business, and countless U.S. farmers were already on the verge of going under even before we got to 2019.

Now that this year has been such a complete and utter disaster, many farms will not be able to operate once we get to 2020.

Minnesota farmers Liz and Bob Krocak were hoping for better days ahead as this year began, but things have been really tough and their debts have become overwhelming.  During a recent meeting with their creditors, Liz was so distraught that she literally burst into tears

They had to face their creditors at a mediation. There was Del, the mechanic, whom they owe $28,000 and who now can’t help his son buy a home. There was Steve, the feed store guy, who is 64 and has delayed his retirement because of the Krocaks’ $311,000 bill.

Liz recalled the mediator opening the meeting by saying, “This is going to be an emotional day. I can see everybody really likes this family.” Liz had burst into tears then – and she was crying again now, describing the scene seven months later.

“We just hope there’s a farm left at the end of it,” she said.

In total, the Krocaks just happen to be 1.3 million dollars in debt.

At this point, there isn’t a prayer that all of that debt will ever be paid off.  All they can really hope for is more patience from their creditors, because without it the farm is going under.

The Krocaks recently received a check for about 12,000 dollars from the federal government, and they are very grateful for the money, but the truth is that it isn’t even going to make a dent in their 1.3 million dollar debt.

If the horrific weather and endless flooding wasn’t enough, about a week ago the Chinese government announced that they would be ending all “purchases of U.S. agricultural products”, and that was a devastating blow for farmers all over the nation.

In particular, soybean farmers are going to see demand for their crops absolutely collapse.  In recent years, China has purchased approximately 60 percent of all U.S. soybean exports.

And even if a trade deal is eventually reached, it is unlikely that all of that demand is ever going to come back.  Right now, the Chinese are spending enormous amounts of money “to build transportation infrastructure to ship soybeans grown in what used to be rain forests” in Brazil.  They aren’t going to abandon all of that just because Trump suddenly changes his mind.

And the truth is that it is extremely unlikely that Trump will change his mind and cave in to the Chinese.

So for the foreseeable future, U.S. farmers are going to be facing weaker markets and lower prices, and that is going to be the final straw for many of them.

Have you ever been at a point in your life where you have endured problem after problem and then one day a final crushing blow comes along that takes away the last shred of hope that you were holding on to?  That is precisely what has happened to farmers like Bob Kuylen of North Dakota

“It’s really, really getting bad out here,” said Bob Kuylen, who’s farmed for 35 years in North Dakota.

“Trump is ruining our markets. No one is buying our product no more, and we have no markets no more.”

We keep hearing about “government bailouts”, but they aren’t going to be nearly big enough for most farmers.  Kuylen has worked as hard as he possibly could, but he was not able to overcome the challenges he was facing, and now he is facing financial disaster.  He would walk away, but he says he can’t because “I’ve invested everything I have in farming”

Kuylen, who farms roughly 1,500 acres of wheat and sunflowers, lost $70 per acre this year, despite growing good crops. Current government subsidies only cover about $15 per acre, he said.

“There’s no incentive to keep farming, except that I’ve invested everything I have in farming, and it’s hard to walk away,” he said.

It would be nice to think that all of these farmers will somehow bounce back next year, but that isn’t likely.  It is very doubtful that there will be any sort of a trade agreement with China before the 2020 presidential election, and global weather patterns are not going to be getting any more stable.  Sadly, it is entirely possible that next year could be even tougher for U.S. farmers than this year was.

So please say a prayer for our farmers.  They grow the food that we all eat on a daily basis, and their hard work is rarely recognized on a national basis. They are unsung heroes, and right now most of them are really, really hurting.

  • ProsperityForRI

    It seems the only farmers doing okay are those growing specialty crops and those farming organically. Tiime to give up chemical farming.

  • Greeley Miklashek

    And just how much profit are the holders of all this debt making? Farmers have been sold a load of crap and now the Grim Reaper is knocking at the door, but yet many still support our Mad King Donald as the leader of their Populist Revolution against the Coastal Elites. Why they are not 100% supportive of the Progressive Populist, Senator Sanders, is a mystery to me. Same for Blacks, especially Black women. We may just be too damn dumb to survive. I hoe not. Time will tell. Go Bernie!

  • There is so much wrong about what this article has gotten so right. Groundhog day is upon. We are reliving a nightmare of our own creation.

    We often hear talk about how America is the food basket for the world, yet the global monetary-market economic system that is supported and promoted by American Empire is the apex of the dysfunctional human culture that is driving the 6th great extinction of the Anthropocene. The natural life supporting ecosystems of the Earth are shifting rapidly right now as a direct consequence of out of control human economic activities, like the razing of the Amazon rain forests to grow soybeans for profit and the economic warfare of sanctions used by nations to manipulate and control the natural resources necessary to maintain their positions of economic domination.

    Meanwhile, the economic systems that drive all these behaviors constantly create artificial scarcity to control and profit from economic markets leaving people all around the world starving in a world of relative plenty and homeless while the banks foreclose on our homes and farms that sit idle and vacant just as they did during the Great Depression. It is already too late to stop the global ecological shifts set in motion by global warming. Mitigation alone, though absolutely necessary, will be much too little, much too late, largely because of the deep system resistance to cultural changes built into the profit at any cost driven corporate controlled global monetary market culture. The process of deep cultural adaptation is accelerating decades earlier than most of our scientists have been predicting, because, just like you and me, our scientists are also trapped and conditioned by the existing culture of modern socioeconomic monetary market civilization.

    Deep cultural adaptation is coming whether or not we like it. How many of us and how much of modern global civilization will survive this process being driven by the scarcely understood natural life ecosystems of our planet is one of the only uncertainties remaining. The 1% are building their survival bunkers and their hidden retreats where there primary concern has become how will they pay their guards when money no longer matters. It occurred to me just yesterday, that the obvious solution for the 1% is the same corporate solution being implemented nearly everywhere, automation. No wonder Elon Musk is so terrified by robots and AI. We can’t buy our way out of the crisis we have extracted ourselves into using UBI.

    A total and fundamental cultural reset is coming. We should have begun implementing natural law resource based economic communities everywhere decades ago. We still must though with each passing delay it becomes only more difficult and more of life upon this beautiful planet will suffer and die because of human ignorance, arrogance and cupidity. As more of our farmers struggle to sustainable grow the food we all need because the weather becomes increasingly uncertain we are being forced to abandon the natural gardens of the earth and instead use our technology and collaborative skills to build vertical environmentally controllable greenhouses to maximize our utilization of resources and produce the food we need in our local communities. Planet > People > Profit has always been the economic model of the natural world. Human imagination is powerful but it works best when it most accurately reflects the natural world upon which we all depend. The entire monetary market system is a deeply flawed human conceptualization of natural world processes. Money sprang from the human imagination, not from the natural world. Sharing and collaboration much more accurately reflect the best of natural human capacity than does money and competition. The more of us that come to recognize that truth about a human nature that has emerged from the natural world, the more quickly we will be able to navigate the self created existential crisis of climate change and realize our role in the natural world as deeply interdependent co-creators of life.

    Extinction Rebellion has a lot of this right. We have focused so much of our efforts on shaping the world around us to fill our every whim that we have failed to recognize that it is human culture that needs to be reshaped in the image of the natural world. Business as usual is finished. Either monetary market economics will goes extinct or humanity will follow the dinosaurs into the fossil records of the natural world. How we help that cultural shift to happen is the only question of real concern remaining. Many of us are deeply grieving the loss of a world we were led to believe existed by a deviant human culture. We are angry, depressed, outraged, stressed and increasingly struggling just to survive. We need to embrace one another and get on with the business of learning to harmoniously co-exist with the natural world and with one another. That must become our new human cultural business as usual.

  • rgaura

    Most of these agribiz farms are poisoning us all. They deserve to fail. The crop spraying of Roundup in the midwest is falling with rain and snow in Montana where wildlife biologists have observed extinction of several bird species, and death of young herbivores. The already poor soils are chelated by the glyphosate. Creatures deprived of zinc grow undershot jaws (or beaks), and consequently starve to death. Not to mention all of the other mineral deficiency diseases and ecological disruption that have not yet been studied!
    I would say this is a wonderful opportunity to break up large farms, ban most chemical farming, and give people family farms, or stakes in cooperatives. This should be part of a green new deal. It could even be part of reparations. This would capture tons of carbon, regenerate soils, and give people meaningful, complex creative work where they can also be at home. Banning CAFOs and their polluting cruelties, can put those animals back on small farms to help regenerate the soil. You can regenerate soils that have used Roundup for decades with the addition of highly mineralized volcanic rock ground up, and animal manure. We need to do this urgently.
    Been reading Wendell Berry again this week. Back in the 70´s he did an eloquent analysis of agriculture and culture, and where the government went wrong in its assumptions about `progress´. Really worth a read.
    I sympathize with many farmers who have been corralled into this horror show by bankers and experts in exploitation, and also with the destruction of a once healthy way of life. Their families are most at risk for health problems, no matter if they are solvent, in debt or not. They could also profit by a green new deal. Land grant colleges and farm subsidies should go exclusively to small and medium farm businesses, and actively recruit farmers from our underemployed youth. Hemp and cannabis are also regenerative crops, easy to grow for beginners, and do not require chemicals.
    Throwing money at wasteful, immoral institutions that do more harm than good is not a great policy!

  • ANTONIO

    CAPITALISM

  • JOE peeer

    we could drone agri implementation this planet of ours, in to a mechanically maintained garden of Eden ,,,with the machines feeding us all,,,,,and wild orgies ,,,,,and u worried about some banker stealing ur worthless paper ….

  • chetdude

    CORRECT!

    “Farm subsidies” designed to promote and perpetuate destruction of soil and use of the resulting dirt as a tabletop for petroleum and chemical based production of tasteless crops or crops meant for animal food and to burn as fuel must be REMOVED from the budget (along with fossil-fuel subsidies).

    Money made available in the REAL Green New Deal must be directed toward saving REAL family farms by enabling them to convert from being small cogs in a global consumption machine into farms practicing diversified, Regenerative Organic Agriculture to insure their continued survival — or better allow them to thrive and support and employ more people in a soul satisfying endeavor.

    As for the millions and millions of acres that are owned by CORPORATIONS — mega-farms, that land should be seized and returned to the people to be regenerated for the Public Good.

  • chetdude

    Wow, you don’t know much about Ag, do you?

  • JOE peeer

    how much do u know ?,,,,could u help us make it better ?