Farm Profits Remain High

Despite the worst drought in recent memory, farm incomes and farm profits remain astronomically high, in part thanks to the devastation caused by the drought.

Last year’s devastating drought crippled production across the country, particularly corn production in the Midwest and the Great Plains. Farmers who had planned to harvest the largest corn crop since the 1950s, instead saw their fields bake and their crops wither.

Despite the devastation wrought by the drought, farm profits remain high for 2012. In part, the drought itself has helped increase average incomes. With the corn crop in ruins, prices have skyrocketed (helped by the continued demand for ethanol production). Farmers who managed to salvage a portion of their crop were able to make significantly more money than they might have otherwise.

In addition, generous federal crop insurance programs have helped insulate farmers from the worst of the damage, offering them an important safety net.

Despite these averages, however, many farmers are not enjoying the overall boom. Ranchers, for example, are unable to share in crop insurance protections, and have suffered significant losses in the face of the drought. Others farmers have avoided disaster thanks to insurance, but are finding themselves only making ends meet thanks to the drought.

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Written by: Justin Ellison / Farm Plus Staff Writer