‘Is it really worth it to keep going on?’ Economic pain hits America’s farm belt

By Chris Isidore, Tami Luhby, CNN

(CNN) — John Yeley has spent the last 26 years working on his farm, which his family has owned since 1852.

Yeley is the seventh generation to run his farm in Illinois, just over the state line from Indiana. Although he plans to keep doing so, he’s not sure he wants his 16-year-old son and 12-year-old daughter to take over because the current economics are so rough.

“Right now, the way all of this is now, no, I wouldn’t wish it on them,” he said about farming.

Farmers like Yeley as well as agriculture experts agree that the farming sector is in a painful recession. Farms are dealing with record-high diesel prices, a fuel that is critical to their equipment. Trade disputes have cut off access to vital markets. Wars in Ukraine and the Middle East have sent fertilizer costs soaring, just as farmers pay higher interest rates on the loans needed to get from planting to harvest season.

Yeley is not sure he’ll earn a profit this season, even with prices up for for his corn and soybeans.

“We’re not a big county, but we’ve had three farmers go under this year,” said Yeley. “I know that’s on the minds of everybody, is it really worth it to keep going on? The stress level is pretty high.”

Record high costs to power the farm

Currently, the price of diesel is the most pressing problem for farmers.

Diesel is a workhouse fuel that powers farming equipment, like tractors and combines. The national average for diesel has accelerated faster than the price of gasoline and is now near its recent an all-time high of $6.53. In many states in the Midwest farm belt, the cost is even greater: The average price in Illinois, for example, was $6.82 as of Friday.

Farmers generally buy thousands of gallons each year. Yeley usually buys 8,500 gallons twice a year to run his equipment.

“This is the first year in my adult life that we have not bought an entire transport load either spring or fall due to fuel cost. We’ve been buying it piecemeal … 1,000 or 1,500 gallons at a time, hoping that we’d see a price drop,” he said. “Unfortunately, it’s not happening.”

‘You work so hard not making money’

Sammy Tookey grows all manner of produce — tomatoes, corn, melons, peppers, squash, lettuce and chiles — on 10 acres in northern California’s wine country. He sells about half his harvest to a food co-op and the other half at three farmers’ markets each week.

He’s feeling the squeeze from higher prices for diesel, as well as cardboard boxes and fertilizer – costs of which have also increased by double digits over the past year.

Russia’s war with Ukraine first cut off supply of some of the raw materials needed to make fertilizer, boosting prices. That only got worse this year, when the war in the Middle East cut off fertilizer exports. Fertilizer prices are as much as 50% higher in the last year, according to experts and farmers.

Tookey has raised his prices but not enough to keep up with ballooning expenses. He said he doesn’t want to scare off customers.

While he plans to plant again in the spring, he’s uncertain how long he’ll remain a farmer. Tookey is getting married in late October and worries about how he’ll support children.

“Being able to have a family and a farm seems almost impossible,” he said.

Tookey’s stepfather, George Kibby, has a bleaker view of the current state of farming. He retired in July after 40 years in the industry because the land he leased in Orange County, California, was sold for housing.

The cost of land, equipment, labor — along with the instability of prices for essentials, such as diesel and fertilizer — makes it impossible to earn a living these days, he said.

“Us little farmers don’t have much of a chance,” said Kibby, who moved north with his wife this summer to help Tookey. “You work so hard not making money.”

Mounting losses, bankruptcies

Besides the cost of raw materials, there are many other factors squeezing farmers.

Most farmers take out short-term loans to cover costs between planting and harvest. Interest rates are higher as central banks raise rates to tamp down inflation, pushing up borrowing costs.

Various US trade wars, particularly with China, have cut off critical markets for products like soybeans. That’s driving down prices in the short term, and farmers worry that market share will be lost in the long term.

“Our farm and the vast majority of the farms (I know) are anticipating they’re going to be losing money this year, and the vast majority lost money last year,” said Aaron Lehman, president of the Iowa Farmers Union and a fifth-generation farmer.

“Farming does have ups and downs naturally, but when it happens year after year after year, eventually you’re no longer a good credit risk, and you can’t borrow money to keep farming,” added Lehman, who grows corn, soybeans, oats and hay.

The number of farm bankruptcies rose 20% in the 12 months ending in June compared to a year ago, according to federal bankruptcy filing data. But the worst is yet to come, said Tom Ajamie, an attorney active in the farming sector.

“A lot of these farmers are on the edge,” he said. “So yeah, It’s a 20% increase right now, but what happens in the next two, four, five months? A lot of farmers are just barely clinging on right now. You will see that number increase, I guarantee it.”

Some congressional members from farm states, like Republican Sen. Charles Grassley of Iowa, have pressed the Trump administration to ban US diesel exports as a way to get immediate relief. But many energy experts doubt that will lower diesel prices.

The American Farm Bureau Federation and other agriculture groups seek the passage of a new farm bill, which has cleared the House. The proposed legislation includes help for farmers, like raising federal farm loan limits that haven’t changed since 2018.

“You get into the lame duck session, and I think we can find a bipartisan path forward on a lot of things,” said John Newton, vice president of public policy and economic analysis for the American Farm Bureau Federation, referring to the period after midterms and before the new Congress begins.

Even if a bill eventually passes, even if diesel comes down later this year, that won’t help the farmers harvesting crops right now.

Many told CNN that they feel like victims of things set in motion around the globe over which they have no control.

“Farmers are used to dealing with unpredictability with weather, you know, soil conditions, livestock,” Lehman said. “Policy decisions that have put farmers at the right in the front of economic damage – that’s what’s very frustrating.”

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