I’ll never forget the sage words an old farmer told me when I announced my intention to start farming in the late 1990s. I explained that I was not leaving my marketing job and that I was also doing a fair amount of freelance consulting work. He told me, “It’s funny how many other jobs you need when you farm.” He, himself, was also a full-time district seed manager. I’ve long said that to remain viable, farmers need to get big, get specialized or get off-farm income. Recent data supports this contention: a staggering 82% of US farm household income now comes from off-farm sources. Moreover, half of all farming households have negative farm income in a typical year. Of course, household income can include the spouse having a job outside the farm; but 56% of farm principal operators now have a main job off the farm, compared to 37% in 1974. This skews higher among young farmers as nearly 2/3 of farmers aged 35 and under have primary off-farm jobs (I was among that demo back in the day). One of the key motives for off-farm employment is obvious: to provide additional income against an uncertain profession. Just as important for many is health insurance. As independent, self-employed businessmen, annual health care costs easily run well into the five-figures with sky-high deductibles, even for young, healthy farmers.
There was a slight uptick in farmer sentiment last month, based on the Purdue Ag Economy Barometer. Higher than expected yields was a likely contributor. Yet, it was not enough to curb a declining Farm Capital Index, which reached a yearly low. Nearly 4 out of 5 farmers believe now is a bad time to make capital investments. Why the pessimism? It starts with high interest rates (41% of respondents listed as the top reason), which show little sign of dropping. Declining commodity prices and high crop input costs are major factors.
Many policy decisions are being made these days based on taking climate action. So what climate actions are farmers taking? According to a recent study, 24% of corn and soybean producers have explicitly made changes in their farming operation in response to changes in long-term weather patterns in their area. Among those who have, the top change implemented was no-till (25%) followed by changed mix of crops planted (23%). Both practices offer a wide array of advantages based on labor, soil health, risk management and cost savings. What’s more appealing to farmers than climate action is action that can improve the profitability of their operation. I recently heard one farmer say, “It isn’t about the climate, carbon credit, or no-till… it’s about feeding the soil, water infiltration, weed suppression and recycling nutrients…. and most importantly, striving for zero soil loss.” Perhaps another way of saying it is, it’s not about buzzwords or furthering someone else’s agenda, it’s about improving profitability on their farm. That’s what soil health and regenerative agriculture is all about.