The other day I was at an area grocery story where I was able to buy a gallon of milk for $1.99. Granted, it was a special sale and you needed a coupon, but still ridiculously cheap. Even the normal price of $3.49 is a bargain. But after perusing the news this morning I realize the consumers’ good fortune is coming at a high price for many farmers. This is definitely the case with dairy farmers. The national average price for a gallon of milk today is just $3.23. That’s less than it was a decade ago!
But the pain being inflicted upon farmers doesn’t stop at the dairy. Many farmers are having to endure what seems to be developing into the perfect storm of events. With good weather and robust crops, prices they can ask for their various commodities are very low. That would be bad enough. But adding even more pain to farmers are rising interest rates.
It seems that most farmers need to borrow money in spring as the planting season begins. They then pay it back with the proceeds from the fall harvest. With thin profit margins, any jump in interest rates can spell doom for some farmers. And the Fed is almost certain to raise interest rates at least three times, if not more, over the next year. It’s easy to see why farmers are nervous about the future possibility of foreclosure. This anxiety has possibly been a cause for the recent spike in the suicide rate for farmers, one considered to be the highest of any profession.
And so as the economy hums along and we’re getting bargain prices on some items at the grocery store, the people supplying the food to us have seen much better days. Little did we know just what big gamblers our farmers need to be to do business. Let’s hope they cash a bet or two in order to avoid tapping out.