A lot has been said about the US-China trade dispute and its potential impact on American farming communities and the country’s agricultural economy. Yesterday, my good friend, Michael ‘Mike’ McDougall at ED&F Man Capital Markets in New York, introduced an interesting perspective to the debate – ageing American farmers. Without clouding his views, here is Mike undiluted:
Farms in the United States are feeling the pressure financially from the trade war. Lower prices and China cutting off the buying of US soybeans are hitting farms after they have already seen their revenue drop since their peak in 2013.
Farms, in general, are indeed, feeling pressure from demographics. Taking Iowa State for example, 60 percent of Iowa farmland is owned by people 65 years or older, and 35 percent of farmland is owned by people 75 or older. The latest 2017 census isn’t available, but data from 2012 show that the average age of the American farmer was 58.3 years.
This isn’t because young people in rural America don’t want to farm, it’s because, if it isn’t already your family business, the entry costs are much too high. Iowa is an example, but a similar situation exists throughout the farming sector.
Now elderly farmers have the added pressure of the trade war to put up with and smaller farms might not have the capital to weather this storm.
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