If you haven’t adjusted your cash flows this year to reflect higher fertilizer and energy bills, and lower government checks, you’re likely going to come up short on cash at the end of the year.
"Higher nitrogen and fuel costs for corn will likely increase production costs by $15/acre," says Purdue University ag economist Mike Boehlje. "And, I think we’ll see a $15/acre decrease in AMTA payments. Combined, that’s a $30 hit that the operator will take. Not the landlord. Those government payments are already bid into the cash rents."
The only remaining question, according to Boehlje, is how much emergency assistance farmers might receive in 2001. At the end of the year, net farm income could be reduced by 10% to 15% compared to 2000, the ag economist says, if the emergency assistance is reduced significantly from last year.
"Good times are coming in agriculture," says Boehlje. "But I think farmers are going to have to make it through another couple of years before we get to them."