FRANKTON – Summer heat is scorching the fields Mike Shuter hopes to harvest this fall.
But Shuter, the owner of Shuter Sunset Farms, is worried about the drought that has blanketed the area for weeks.
He’s leasing a new combine to do his job, but supply constraints — as well as a worker strike last year at a John Deere plant in Illinois — have pushed the new machine’s ship date to the midpoint. By October, the harvest season will have begun.
“We have our previous compost pile sitting on our lot, and it’s not going away until we get a new one,” Shuter said.
When it comes to creating the businesses needed to grow their operations, Shuter and many other farmers in Indiana are falling behind — and they seem poised to do well until next year. In addition to rising prices of seeds, fertilizers and other agricultural products, farmers are facing rising commodity prices and are recording fuel prices. It’s a perfect storm of bad economic news that has caused the agricultural index to plummet.
The Purdue University/CME Group Ag Economy Barometer, a monthly index measuring the health of the nation’s agriculture sector, came in with a reading of 97 in June, its lowest reading since April 2020. The Barometer Index of Future Expectations also fell five points to a reading of 96, indicating the group’s lowest since October 2016.
The report was based on a telephone survey of 400 farmers on financial issues each month.
“Rising input costs and uncertainty about the future continue to weigh on farmers,” said James Mintert, the barometer’s senior researcher and director of Purdue University’s Center for Commercial Agriculture. “Many producers are concerned about rising production costs and volatility in commodity prices, which could lead to lower production costs in 2023.”
These concerns are causing farmers not to accumulate more crops after a year.
“Everyone is sitting on their hands and waiting to see what happens,” said Jon Sparks, who serves on the Indiana Farm Bureau’s management team and oversees a district that includes Delaware, Hamilton, Hancock, Henry and Madison counties. “You don’t want to have a lot of stuff that you can’t sell at a good price at some point.”
Shuter admits that sales prices and availability have him considering changing his seed mix next year. But since about 20% of his crops are organic, Shuter said he has a bit of a cushion. In addition, with 4,000 pigs, the farm can reduce its need for fertilizers.
“We have been about two-thirds of corn and one-third of beans since Biorefining came to the area. I don’t see us changing that,” Shuter said. “Do we reduce nitrogen again? Maybe. Do we substitute other cover crops for nitrogen? Maybe. The question is, how can we maintain our production and perhaps eliminate some of the costs (inputs)?”
Sparks, who farms about 2,000 acres in Delaware County, said the ongoing war in Ukraine is another factor that has put “a lot of pressure” on farmers as they prepare to harvest and continue planning for next year. The funding question, he said, could haunt them for months to come.
“There’s also a desire for people to change things,” Sparks said. “You won’t feel the pressure of high prices until six months from now. We don’t have a shiny ball to see what will happen in the world, but I don’t see people being bullish on the market in the coming months.
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