Tightening the Belt and Smarter Marketing Could Make the Difference for Farmers in 2016Tue, 03 May 2016 23:45:35 CDT
American farmers may be too good at what they do, says Bob Young, American Farm Bureau’s chief economist.
Above average yields over the last few years have driven down commodity prices, and combined with decreased growth in domestic demand and exports, Young says farmers are now teetering on the brink of a real crisis.
“Agriculture has a long, long history of basically producing the profit out of any situation, and here we are again,” he says. “If commodity prices stay where they are and we do not become very shrewd marketers, we could be facing a challenge in 2017.”
Young says corn and cotton stocks entering the market from China are adding to an already abundant world supply.
“I don’t think anybody knows how many corn stocks or how many cotton stocks the Chinese are sitting on at this stage of the game,” he says. “So the challenge now becomes as those bleed out - and you want them to bleed out - that’s just that much additional supply that we’ve got to suck up for as long as it takes to get that supply sucked up.”
In the meantime, Young encourages farmers to evaluate the need for every dollar spent until demand growth increases.
“In the old days we talked about sharpening the pencil, and today we are going to talk about really looking at the spreadsheet,” he says. “If we don’t have to buy the input, then let’s not buy the input.”
Ron Hays caught up with Young last week during the National Farm Broadcasters Washington Watch. Click on the LISTEN BAR below to hear the full interview.
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