Farm numbers

Costs are up and profits are down, it’s a fact for Wharton County agricultural producers and they’re having to adapt to a changing financial landscape to stay afloat.

Costs are up and profits are down, it’s a fact for Wharton County agricultural producers and they’re having to adapt to a changing financial landscape to stay afloat.

“We own our own trucking company through the farm, because we own our own grain dryers. It helps us optimize our profits, we can be more vertical,” Danevang farmer Dean Hansen said Monday.

Hansen isn’t alone, the U.S. Department of Agriculture reports almost 90 percent of farms have less than $350,000 of gross farm cash income and depend on off-farm income for the household.

“Profit margins per acre are not where they were in the 70s and 80s. So farms have to expand to stay profitable,” Hansen said, adding “We’ve bought out four different operations as we expanded our acreage.”

As input costs for farmers increase, commodity prices need to raise faster for producers to make up for those costs. Record costs aren’t being matched in the produced commodities.

“In 2010 we bought a bailer for $460,000, last year we bought almost the same machine for $715,000,” Hansen said.

Fertilizer prices reached their lowest prices since 2011 on December 2020, and increased almost 50 percentage points to today’s prices as reported by the USDA. Over that same time period, corn prices increased from $3.97 per bushel to $6.10 per bushel.

Even as farms expand, entering the profession is becoming less common, the USDA reports the loss of almost 200,000 farms nationally since 2007.

“When we started, we had FSA (Farm Service Agency) loans and guaranteed loans. I can’t imagine someone trying to come in and farm two and a half thousand acres,” Hansen said.

As farm sizes steadily increase and the number of farmers decrease, there are fewer people to take the reins as older farmers start plan their exit. The Texas Department of Agriculture reports the average age for farmers and ranchers in Texas is 59.

“The spookier part for these producers nowadays, you always plan for how you’ll (retire) and now I don’t see how you can,” Hansen said, adding “It would have to be multiple players that come in and buy bits and pieces or you get absorbed by other farms. I grew up in Danevang in the 70s-80s ... there were 10-15 agriculture families and now there’s probably less than five,” Hansen said.

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