February 26, 2009
Farming during the recession
The recession is focused on industries like banking, housing, the stock market and autos. But what about one of our oldest and most basic of industries: farming. How are things down on the farm during the recession?
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"Fortunately, we haven't had the kind of financial problems in farming that we've seen in other industries. Farming does rely on credit. Most farmers have to go out and borrow money during the planting season. They pay it back after the harvest, but we haven't really seen any problems with farms being foreclosed on, etc. like we've seen in the housing markets, so that's been a plus. Also, farming benefits during a recession by the fact that people still have to eat. They may eat different kinds of foods, but they still have to eat because food is what we call a basic commodity. Lower fuel prices recently have helped farmers, but all is not perfect. The prices that farmers receive have come way down. We had very, very high prices for a lot of farm commodities a year ago, two years ago, but those have fallen so that may be squeezing some farmers even though their fuel costs are lower. Financing is tighter for many farmers just because of the position of banks. And land values are down for many farmers. So it's a mixed bag, but I'd say overall farming has held up fairly well and is expected to hold up well during this recession."
Posted by Dave at February 26, 2009 08:15 AM