Agriculture economy under strain

A storm is brewing over Kansas and the agricultural economy that drives the vast rural areas of our state.

While the nation is generally on an upswing after the Great Recession, Kansas farmers have fallen into another recession in the past two years. If things go poorly for farmers this year, many could face dire financial consequences.

Consider these facts, as noted in an Eagle news article last Sunday:

▪  Prices for grain and livestock grown in Kansas have dropped to 10-year lows, making for slim profit margins.

▪  Farm income in Kansas has fallen more than 40 percent since hitting a peak in 2013. Income for the owner of a farm has dropped an average of 66 percent.

▪  The value of farmland in Kansas has dropped 20 percent from its peak, meaning farmers have less or no equity to secure loans.

Add into that equation the devastation caused by wildfires in parts of the state. Then mix in uncertainties about drought and international trade. The future for farmers becomes even more worrisome.

Because of low prices, even a normal crop this year could mean farmers won’t be able to cover costs or pay off debt, said Mykel Taylor, an agricultural economist at Kansas State University.

Exports offer promise for farmers, but even that avenue is in question. President Trump pulled the United States out of the Trans-Pacific Partnership, and he is discussing other potential changes.

In January, a group of 133 businesses and associations related to the food and agricultural industry sent Trump a letter pointing out the benefits the North American Free Trade Agreement for farmers, ranchers and food processors in the United States.

Trump talked of eliminating NAFTA during his campaign. The groups that signed the letter, including Cargill, said they want to work with Trump to modernize NAFTA “in ways that preserve and expand upon the gains achieved.”

Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said at a hearing last week that “the importance of trade for the agriculture industry cannot be overstated.”

The trickle-down effects of struggling farms and ranches are far reaching. Farm equipment dealers, food processors, repair shops. The stores where farmers and their employees shop. The restaurants where they eat – or don’t anymore because money is tight.

Ultimately, the food that ends up on our tables can be affected.

Farming is a way of life for many Kansans and is part of the fabric of our state. Farmers are a symbol of resilience and perseverance. Their way of life must be preserved.

Governments at all levels should keep that in mind as they make decisions that affect farmers during these challenging times.

This story was originally published March 26, 2017 at 5:05 AM with the headline "Agriculture economy under strain."