BISMARCK-North Dakota Farmers Union this week are sending 44 people to participate in the National Farmers Union's legislative gathering in Washington, D.C., to raise awareness in Congress about the worsening farm economy.
NDFU President Mark Watne said the 275 participants in the fly-in will visit every member of Congress to tell them about the 63 percent decline in farm income from 2014 to 2015. Defining the problem is the first step; the harder part is finding a way to fix it in time to save family farms and rural communities, he said.
"We're getting a lot of understanding about the issue," he said. "But we're not getting a real good set of solutions."
Andy Swenson, farm and family resource management specialist at North Dakota State University, said 2007 to 2012 were very good years for farm income, with 2012 being a "tremendously profitable year" for farmers. Those conditions helped pull more young people back to the farm. But average net farm income went from $76,404 in 2014 to $28,600 last year.
"Now, it doesn't even provide income for one family let alone two," Swenson said.
Cost of production increased a lot from 2004 to 2013, and though it has started to come down, it hasn't dropped as far as the prices farmers are getting for their crops, according to Swenson.
"It's been a sharp reversal of fortunes, and, hopefully, the balance sheets were solidified in those goods years so you have a little cushion," said Swenson, adding that those in a good situation coming out of the strong years likely can refinance their obligations at least for the next year.
But Watne worries that producers - especially young ones - without enough equity or a strong enough balance sheet might be out of luck when it comes time to get operating loans.
"If you can't give them equity, you're going to have a problem," Watne said.
Swenson said the 2014 Farm Bill did away with direct payments, which paid some producers regardless of situation, which helped make up for poor prices or yields. However, Swenson and Watne said those programs have not kept up with the cost of production.
"Nobody could really plan for this much of a drop in prices," Watne said.
While solutions are hard to come by, Watne has a few ideas. He believes the level of support in farm programs should be based on the cost of production. Additionally, he believes the American people need to be shown the benefit of the nation's food system and the importance of having a broad base of farmers rather than be reliant on other countries or a concentrated system of a few producers.
Farmers Union members at the fly-in are asking members of Congress to support the Renewable Fuel Standard and to make sure the Department of Justice is adequately considering whether mergers among agricultural companies are producing monopolies.
Additionally, they are asking for more prudence in trade agreements that have often left American farmers and ranchers with more negatives than positives.
Swenson said such downturns in farm income are cyclical and usually correct themselves. Fewer people will produce crops for low prices, reducing supply, while low prices lead to increased demand.
"They say low prices will cure low prices," he said.
Keeping costs down in ways that won't hurt yields will be important, as will looking for crops with a brighter outlook, according to Swenson, who said corn and wheat - two of North Dakota's biggest crops - have taken the biggest price hits, but others have remained marginally stronger and allow for better chances to at least break even. Production costs should decrease somewhat for next year, he said.
The tough farm economy likely will cost the state some producers, though time will tell how many, Swenson said. Strong yields, including a record corn yield and strong wheat yield, should help balance things out.
"It's bad," Swenson said. "Could have been really bad."