By BECKY KISER
Hays Post
The Kansas Farm Management Association, part of Kansas State University’s Agriculture Economics Department, released its annual member data June 15. Net farm income plummeted last year to $4,568, less than five percent of the 2014 average of $128,731.
“It’s a huge, huge, significant difference,” said Ellis County Extension Agriculture Agent Stacy Campbell. The 2015 level was the lowest average level of nominal net farm income since 1985.
Farmers pay to be in the association and “receive extensive help with record keeping,” Campbell explained. “The whole point is to figure out just what it’s costing to produce a bushel of wheat or corn, or a calf, to where you can try to get leaner and hone down where you can cut some expenses and try to have a little profit margin.”
In 2015, northwest Kansas farms averaged a loss of $2,972, while southwest Kansas farms fared best in the state, with net farm income of $37,423.
U.S. beef cattle prices dropped from an average $166 per hundredweight (cwt) in January 2015 to $132 by January 2016 – the largest one-year drop on record, according to the U.S. Department of Agriculture’s Economic Research Service. Grain prices also dropped significantly over the past four years.
“I think that’s why sometimes the public thinks it can’t be that bad for the farmer and they say the farmers are always complaining. Yeah, you can have a few good years, and it seems like there’s some really bad ones. Last year was not a good year,” Campbell said.
“It’s not that they can’t produce it most of the time; it’s just the marketing of it. It’s really frustrating and nobody’s got the answer.
“Guys try it. When you’re a dryland farmer, you can’t forward-contract too much of your crop–that’s when you can set the price a year out when it’s maybe better–but you have to deliver those bushels. If you can’t, you gotta go out and literally buy those bushels for the elevator or whoever you forward-contracted with,” he explained.
This year’s wheat harvest may be one for the record books with reports of 60 to 100-plus bushels an acre in Ellis County. However, “when you have great crops, that’s what happens,” Campbell said, “the law of supply-and-demand.”
Thursday’s closing cash price for wheat at Midland Marketing in Hays was $3.03 a bushel.
According to Campbell, the wheat price “a few months back wasn’t great, but it was still well over $4 a bushel and teetering around $5 during the winter.
“It’s a very tough game to play,” he added.
Not all Kansas farmers are KFMA members, but the annual report can be viewed as a reflection of financial conditions for farmers across the state, especially when comparing one year to the next. The data presented in the 2015 analysis came from 1,159 KFMA member farms and ranches.