Growing Returns

Selected tag(s): farm finance

Farmer grit created unexpected bright spots in a difficult year

It is a wild understatement to say it has been a hard year in agriculture. It has been a year of loss, heartbreak and stress. As a frontpage Washington Post article captured, “Farm bankruptcies and loan delinquencies are rising, calamitous weather events are ruining crops and profits are vanishing during Trump’s global trade disputes.”

I had to dig deep, but I was determined to find some silver linings.

As I sat with my pen, paper and thoughts, I found I had more and more to write. I was reminded that farmers have amazing grit and determination, which is why, despite the incredible challenges ahead, I remain firmly optimistic that we will find the ways to feed the world while sustaining the natural resources on which we all depend. Read More »

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3 ways agricultural lenders can help farmers reap millions in savings from conservation

The U.S. farm economy is in its worst condition in decades due to several years of low crop prices, ongoing trade disputes, natural disasters and other variable weather. But many farmers are adapting and innovating – implementing conservation practices that build soil health and resilience, such as nutrient optimization, cover crops and no-till.

Still, there is a growing need for farmers to understand the full financial benefits of these practices and prove their value to ag lenders and other financial partners.

Read More »

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Four ways conservation pays for dairy farmers, even in a weak agricultural economy

The dairy industry is a critical part of the landscape, economy and social fabric of Pennsylvania and the Chesapeake Bay. But it’s under stress.

Dairy is in the fourth year of an economic downturn in which many farmers have struggled to break even. Dairy farmers in Pennsylvania and across the U.S. are highly motivated to increase their resilience to unfavorable economic and environmental conditions, including highly variable milk and feed prices, unpredictable farm policies and extreme weather – most notably increased heavy rain events and flooding.

While dairy prices have recently trended upward and PennState Extension’s dairy outlook  predicts milk price could approach $20/cwt by the end of 2019, another PennState Extension analysis  found that the gross milk price breakeven point for most farmers in the state is $21.20/cwt.

Most of these factors are out of farmers’ control, but conservation is something farmers can be sure of.

That’s what my colleagues and I concluded after digging into the budgets of four Pennsylvania dairy farmers in our new report: How conservation makes dairy farms more resilient, especially in a lean agricultural economy. The report shows how a variety of conservation practices can deliver multiple returns on investment that simultaneously benefit the farm budget and the local environment.

Here are our four key findings: Read More »

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A new guide for farmers to boost profits through conservation

As the struggling U.S. farm economy continues to make the news, agricultural organizations, government agencies and conservation groups are rightly focusing their attention on the affordability of conservation adoption.

A 2018 report from EDF and agricultural accounting firm K·Coe Isom, Farm Finance and Conservation, found that farmers who adopt conservation practices such as no-till, nutrient optimization, cover crops and diverse rotations improved their profitability and were more resilient.

Despite these benefits, the costs of transitioning to conservation management practices can be a barrier to adoption. In addition, any change carries some risk, and farmers are likely to be reluctant to take on additional risk in the current economic climate.

For these reasons, it is more important than ever to provide farmers with practical guidance on how to minimize the costs and risks of conservation adoption. Fortunately, a new technical bulletin from the Sustainable Agriculture Research and Education (SARE) program at the U.S. Department of Agriculture does just that.

Cover Crop Economics: Opportunities to Improve Your Bottom Line in Row Crops [PDF] describes seven different management scenarios in which farmers can speed their transition to cover crops and achieve profitability more quickly — in some cases within the first year of adoption. Read More »

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How conservation can enhance a farm’s financial health — even in challenging times

With the U.S.-China trade war and flooding in the Midwest continuing to make headlines, national attention is focused on the increasing economic challenges facing farmers and their families.

After years of weak commodity prices, these financial stresses are adding up. In the Corn Belt, farm bankruptcies are at the highest level in over a decade.

Given this challenging economic outlook, some might assume that farmers will abandon conservation efforts and focus exclusively on their finances. However, many of the financial best practices cited by farmers and encouraged by farm financial advisers are the very same principles that can help farmers continue to improve environmental outcomes. Here are four examples. Read More »

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How farmers’ business partners benefit from conservation

Most efforts to advance agricultural conservation focus on the farmer – with good reason, since conservation practice adoption is the direct result of farmers’ decisions, time and resources. They also focus, of course, on the environment, as the need to improve water quality and reduce greenhouse gas emissions from agriculture grows.

But conservation efforts must also recognize the relationships between farmers and their business partners. Agricultural lenders, crop insurers and landowners are critical to achieving widespread conservation adoption, and it’s in their financial interest to do so. Here’s why. Read More »

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Farmers open their books to show financial impact of conservation

Farm accountants have a lot more to offer than advice on how to maximize tax returns. In fact, they play a pivotal role in scaling conservation.

Environmental Defense Fund and K·Coe Isom AgKnowledge, a managerial accounting service for farmers and ranchers, teamed up with three Midwestern grain farmers to study how the adoption of conservation practices affects farm budgets.

These farmers, based in Iowa, Kansas, and Ohio, have all adopted some combination of no-till, crop rotations, cover crops and nutrient management. They were generous enough to open up their books so that AgKnowledge could analyze the financial impact of these conservation activities.

The full report will be out later this year, but initial results show how conservation can benefit farmers’ bottom lines. Here are three lessons we learned from this analysis. Read More »

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3 steps to close the conservation data gap between farmers and investors

Farmer Scott Henry stands in a soybean field with a tablet computer.

Sustainable agriculture must be economically viable. Photo credit: Leslie Von Pless

In addition to benefiting the environment, on-farm conservation practices tend to create economic value for farmers and surrounding communities. Anecdotal examples of these benefits abound – fertilizer efficiency saves farmers money; no-till lowers labor and fuel expenses; and buffers and wetlands reduce downstream flood risk and drinking water treatment costs.

Quantifying them, however, remains a major challenge. The resulting data gap limits broader adoption of conservation measures.

Farmers care about stewardship, but many conservation practices require large upfront investment or take too long to produce returns. At the same time, investors want to help farmers generate financial and environmental benefits, but a lack of economic data holds them back, according to a study from Encourage Capital [PDF] and the USDA Natural Resources Conservation Service. Read More »

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