Commodity prices at the current prices will mean that we will see large number of operations either shutting down or reducing in size to just survive another year. In the last farm crisis we had in late seveties into early 80's we never saw farm prices where commodity price wouldn't pay back inputs to grow the crop but where we are now this isn't the case cost to just put in the crop is more than we can get back from growing the crop. This is the case we have here with wheat now at harvest. Local price here for spring wheat is between 4.25 to 4.50 per bushel but add in discounts for protein price of wheat slips to $4.00 dollars or less. The cost to put in acre of wheat before land costs is range of $200.00 +dollars plus even with 60 bushel crop were at breakeven at best for paying input costs and not even paying land costs, equipment costs and living costs for farmer. We could easily see cash losses $80 to 100 per acre on farms here and average farm here is between 3000 to 5000 acres so average farm will see net cash loss of 250,000 to 500,000 dollar loss for the coming year. Add in depreciation and asset devaluation the balance sheet of average farmer is going to have significantly changed and then looking ahead for coming year projecting another loss its going to be long winter for farmers. The big question will be how will the new farm program work and how much will farmer receive in payments. Here's the problem with that we will have to grow another crop before we see any cashflow out last years crop. If commodity prices stay at current level land costs will need to be reduced levels we were paying 10 years ago what will landlords and management companies think of these new levels. Also input costs will need to drop like fertilizer prices like they were 10 years ago what will that do fertilizer companies having to work on smaller margins, seed companies, and equipment companies if this is going to be price we recieve for our commodities. This is going to put agriculture into real crisis soon if commodity prices don't rebound to levels that will sustain farmers to operate and be able to pay the bills and maintain what they have now. I can;t think that corn and bean prices are reaching same crisis as wheat has in the last month.
