Apr 11, 2023

Protect Working Capital
Brownfield Ag News

By: Mark Dorenkamp

Farm incomes are expected to drop this year and farmers are encouraged to protect working capital.

Farmer Mac senior economist Blaine Nelson says net farm incomes will likely end up below last year’s record levels.

“But still to a very profitable level, about 50 percent higher than the historical average. So I really want to drive home the point that the farm sector is doing really well.”

However, he tells Brownfield high input costs and rising interest rates are pressuring the bottom line.

“It’s easy to kind of have a short memory in the farming space, and for a lot of farmers that’s great when times are bad. Times are good right now, so the risk is that you start to raise your spending patterns and you burn through some of the working capital that you built up during the good times.”

He says farming is cyclical and preparations for a downturn in commodity prices should be happening now.

Brownfield interviewed Nelson during the Minnesota Agricultural Utilization Research Institute’s New Uses Forum in Minneapolis Tuesday.


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