Are Black Swans Circling over Illinois Farm Fields

My topic for this podcast is, are black swans circling over Illinois farm fields? Over the past month, there have been a lot of articles talking about how bad the farm financial situation is. And so Purdue University with their ag economy barometer says 23% of farmers who expect their operating debt to increase over the next year. The Federal Reserve Banks in Chicago and Kansas City are also showing that their loan repayments are dropping. Their loan demand is rising.

And the fact that areas that are concentrated in grain farming is where the greatest weakness is, where those areas that have livestock are really are not showing as much of a financial downturn. The good news, if you wanna hear that, is is that a recent study by the University of Illinois shows that 75% of Illinois grain farms have a strong debt to asset ratio. That's the good news. The other 25%, however, is having financial stress, and this is because their interest rate expense per acre keeps rising, and this is concern. So if you have farm stress, farm financial stress, what are some strategies for surviving these low profit years?

And this is advice that comes from a a number of farm economists across The United States. First and foremost, communicate with your ag lender on your current situation. Keep them apprised of how you're doing. Next, have an advisory team, a circle of experts and trusted peers you can bounce ideas off of and provide you with input, and your farm lenders should be part of this group as well. This may be a no brainer, but hold off on major equipment purchases except where replacement is necessary, and you'll know when that happens.

Evaluate your tillage programs and determine if all tillage practices are necessary. Is deep tillage necessary? According to Iowa and Illinois, a combination ripper, that's a disc ripper, costs upwards of 30 to $35 per acre. Where lighter fall tillage, think of a high speed disc, it costs $20 per acre. That's a savings of $15 per acre.

Multiply that by $2,000, we're talking serious money. Now are you making two tillage passes in the spring ahead of planting? Cutting out one of those tillage passes saves another $15. All of a sudden, we've got another $30,000 in savings on those 2,000 acres. You combine that with a fall tillage, and you're now talking $60,000.

We're talking real money here. Are your nitrogen rates in line with the corn nitrogen rate calculator? Remember, these are research based recommendations that are evaluated every year when new data comes in from fall harvest on their strip plots. Review your current soil tests. If you don't have a current soil test, get one.

You gotta know what your fertility levels are. If your soil test levels for phosphorus and potassium levels are above the recommended values, then you've got room to reduce these and cut your fertilizer input costs. You wanna consult with your soil fertility advisor when making final fertility decisions. Soil pH, if it's below 5.8, it needs to be addressed. Since soil pH values below 5.8 reduce the availability of soil nutrients, lime is your cheapest fertilizer you can apply.

It makes recommended soil testing interval has is changing. And so here in The I States, I looked at Iowa, Illinois, and Indiana, and all the recommendations have drifted down to every three to four years instead of the previous four to five years, so keep this in mind. Next, evaluate every cropping practice that is done on the basis of whether it is making you money or costing you money. Right now, it's profit per acre, not bushels per acre, that leads to your financial success. Next, are there any additional sources of income that can supplement your your farm income?

So think of out of the box ideas as well. I know a farmer in Northern Illinois that's looking at making his own fertilizer from ground up fish out of the Illinois River. Think of different things you can do. You may be surprised. This is how a lot of of our farms in Central Illinois back in the eighties and early nineties.

They transitioned to organic. They started other farm enterprises all to generate more income for their farms. Practice good self care, mentally and physically. Keep yourself in good health. That helps you manage stress.

And if you or anyone you know is suffering from farm related stress, the University of Illinois Farm Stress website, just Google it, has information about stress relieving exercises, where you can get help right now, and information on the Illinois Agricultural Mental Health Voucher Program for farmers and their farm families. And remember, tough times don't last forever, but tough people do. Thank you, and thanks for listening. University of Illinois Extension.