By MICHELE F. MIHALJEVICH
Indiana Correspondent

CEDAR FALLS, Iowa — U.S. farmers are a bit more optimistic than they were last year, but are still concerned about profitability, and how the world economy may affect them, according to results of a recent survey.

“Farmers by nature are very cautious and concerned,” said Shawn Smeins, managing director and senior vice president of the north central region for Rabo AgriFinance. “The numbers show that it’s better than it was, but it wasn’t very good.”

The results of the Spring 2010 Rabobank U.S. Farm & Ranch survey are based on nearly 600 interviews conducted in March and April. Surveys are done in the spring and fall.

The survey found that nationwide, producers reported a 24 percent improvement in income since last fall. About half, however, said their income was worse when compared to last year.

“What’s happening on U.S. farms and ranches mirrors the global economy. We’re beginning to see improvement,” John Ryan, president and chief executive officer for Rabo AgriFinance, said in a statement. “That improvement translates into some encouraging, albeit patchy, signs of recovery.”

In the north central region, which includes Ohio, Indiana, Michigan, Illinois and Iowa, farmers seemed to have more confidence and optimism than other areas of the country, Smeins noted.

In the region, 58 percent of farmers said their income is worse, compared to 82 percent last fall. The 24 percent improvement was the highest of any region, Smeins said.

The area’s dependence on corn and soybeans leads to more consistency, Smeins explained.

“Other areas, such as the coast and the south, have a lot more crops. Here, the sectors we’ve been in have been pretty good. The farmers have a consistent feel for the marketplace.”

Farmers in the southern region reported an improvement of 23 percent, as 51 percent said their income was worse, down from 74 percent in the fall. In the western region, 63 percent said their income was worse, down from 76 percent in the fall, an improvement of 13 percent.

The survey also found that nationwide, 43 percent of producers reported a decline in profitability.

“They’re generally not feeling much better about profitability,” Smeins said. “The numbers aren’t surprising to me. While they’re more positive about input costs, seed traits are getting more expensive, and they’re worried about that.”

A seemingly unstable world economy, and how that could affect producers is also a concern, Smeins said.

“U.S. agriculture has always been resilient in the face of many challenges,” Ryan added. “Producers are accustomed to the cyclical nature of agriculture and are able to better manage their operations by thinking long-term and adapting their operations for the future.”

Smeins said two numbers from the survey - the number of farmers who expect to purchase land or equipment - are positives for the industry.

“Twenty percent said they expect to buy land in the next year,” he said. “People are looking to purchase. They’re starting to feel better about things.”

In the north central region, 35 percent said they plan to make new or used equipment purchases in the next year, the highest in the country, he noted.

Nationwide, slightly less than one third expect to make equipment purchases in the next year.

For the Hudson family of Roann, Ind., any equipment purchases would be based solely on necessity, Jeann Hudson said.

“If we buy something, it’s only because we need it,” she explained. “We may need to purchase another grain leg, and my brother-in-law would really like another tractor. If we do make these purchases, it won’t be because we’re thinking we should update because times are good. That’s not happening.”

Stan and Jeann Hudson raise about 5,000 market hogs a year and have about 1,400 acres of row crops.

While Stan and Jeann run the hog operation, Stan’s brother Kenn and his wife Lorraine handle the Hudson Farms, Inc.’s dairy business.

Given the current hog market, it’s hard for the family to be confident, Jeann explained.

“It’s been so long since the market has stayed at a profitable price. And in the grain market, with the world economy like it is, we’re not confident in those markets at all.”

If Hudson had been given the survey last fall and this spring, she said she would have expected their income to go up last fall, but now, she’s not sure she would say that for the next six months.
“It is still better than it was a year ago. At our age and with the facilities we already have, we just want to make a good, comfortable living.”