Record Yields Saving Some, but Dangerous to Rely On

In 2016, many farmers were able to break even only because they had such large yields, record yields in some cases.

USDA Chief Economist Rob Johannson says that will likely be the case for 2017 as well, and it’s hard to keep relying on that.

“You can’t count on above average production every single year going forward and so producers know that sooner or later we’re going to have a normal year for weather or a below normal year for weather.”

And if that is the case, Johannson says it won’t be pretty for some farmers.

“We’ll likely hear about very difficult times for some producers.”

Most at risk are producers who enter the 2018 season highly or very highly leveraged.