As an ag economist, my day is usually buried in price data and technical charts.
Numbers… numbers… and more numbers.
Those pesky finance terms that aren’t part of real dinner conversations back where the commodities are produced: In rural America, far from trading rooms and algorithms.
But each month, I’m always paying attention to one number that’s more important than the price of corn or the number of soybeans shipped out of the United States.
And forget what the big banks are doing on Wall Street.
I want to know the results of the Rural Mainstreet Index.
If you don’t know what it is, it’s survey of bank CEOs by Creighton University. The index offers a better glimpse into the financial state of the American farm by focusing on rural economic factors impacting ten states dependent on agriculture and energy.
In November the index, which ranges between 0 and 100, fell to 44.7. It was the 48th consecutive month that the index remained below growth neutral (or reading of 50.0). Further, there is now an indication that banks are now increasing collateral requirements due to weakening farm income. This includes forcing farmers to make sales on their grain by specific dates to pay bills.
There’s another subcomponent to the Rural Mainstreet Index: the farmland and ranchland-price index. In November, it fell to a reading of 36. This is well below the growth neutral reading of 50.0. The combination of drought conditions, weak commodity prices, weak economic conditions, and decline equipment sales have financial experts sensing financial troubles for the farm.
“Since peaking in 2013, farm commodity prices have declined by approximately 17 percent and U.S. farm income has fallen for four straight years. Not surprisingly, Creighton’s overall Rural Mainstreet Index has risen above growth neutral only three times in the past three years,” said Ernie Goss of Creighton University’s Heider College of Business.
This isn’t the only index that has suggested financial problems for farmers.
In November, the Purdue University/CME Group Ag Economy Barometer revealed that farmers “expressed lower sentiment toward the agricultural economy in November on the heels of the fall harvest.”
We’ve been thinking a lot about the financial challenges facing farmers as we’ve expanded our operations across North America.
Has anyone asked if there is another issue impacting the sentiment on farms today?
What if farmers are too stretched too thin to get their work done?
Making Farms More Profitable in the Year Ahead
Today’s farmers have more roles and challenges than ever before.
They’re expected to be a credit analyst, a mechanic, an agronomist, a meteorologist, a great negotiator and an expert on grain quality. Farmers need to understand global economics, how to hedge on prices, even operate trucks and other transportation to bring their grain to market.
We’re trying to do our part to improve farmers’ optimism about the future and to help them make more money when they bring their crops to market.
FarmLead is an online grain marketplace that makes it easier to sell your grain in one place and remove many of the hassles that you face on a day-to-day basis.
FarmLead’s mission is to make farmers the most confident grain marketers and help them get the best price possible for their grain.
Put another way; we want you to have a better conversation with your banker, so they don’t have to respond so negatively to these surveys.
With FarmLead, you don’t have to be on the phone calling around to elevators, digging through USDA basis reports, or digging through local cash bids.
We’re more than a destination to sell your grain. We are an ecosystem created by farmers for farmers, and we’ve made a significant amount of progress in 2017.
The FarmLead Ecosystem in 2018
As combines are put away and the 2017 growing season comes to a close the United States and Canada, we want to highly a few of the many things we’ve done to help farmers reach their financial goals.
• We released our GrainCents subscription service. It includes giving farmers explicit recommendations on when and why it is time to sell grain or hold out for a better price, leveraging FarmLead President & CEO, Brennan Turner’s 93% accuracy on calling the markets over the past two years. Further, every day, Brennan and I give farmers an insight edge on 12 different crop categories. You can have 24-hour access to cutting-edge research and analysis to better understand the global factors impacting your crop – namely what’s bearish, what’s bullish, and what’s the noise you need to ignore;
• Our Marketplace now features more than 100 grain, oilseed, and pulse crop commodity categories. This means that farmers can locate buyers for more than just corn, soybeans, canola, or wheat.
• There are now more than 750 credit-verified buyers, a process that guarantees that you will get paid for your grain on any deal negotiated on the FarmLead Marketplace.
• We released GrainTests.com, a platform that helps farmers locate grain testing facilities all across North America and get their grain tested independently. These services are the same type of grain testing expertise used by literally all of the large grain buying entities across North America, but at a fraction of the price.
• And we unveiled our Price Discovery feature. This first-of-its-kind tool gives the historical and future perspective of what’s going on with grain prices. It’s free to every FarmLead user and helps farmers determine the best time to sell your grain during the marketing year and gives you detailed insight into what you should expect to receive from your grain in your local markets. It is available on both the FarmLead.com website and free FarmLead mobile app for iOS and Android.
The FarmLead ecosystem will continue to expand in 2018. As our team grows across North America – now at 35! – we remain committed to re-engineering the North American grain marketplace and to giving farmers more power in the industry than ever before.