The wettest year in memory continues to decimate corn crops across the midwest, according to Bloomberg.
And it's not just farmers that are bearing the brunt of the flooding, it's the entire agricultural economy. Those that provide supplies like seeds, fertilizer, equipment and services are also struggling. For example, BBG reports that "at Burrus Seed in Arenzville, Illinois, employees spend as much time trying to lift farmers’ spirits as they do selling to them."
Todd Burrus, owner, said:
“If we experienced a year like this, I don’t remember it. When the farm economy is tough, it’s going to be tough for all the suppliers.”
Other Illinois seed business owners echo those sentiments. For instance, business owner Kurt Barman said that he's being inundated with returns:
“All of the seeds are coming back, so that’s lost revenue for us.”
Now, growers don't know whether to trade up to newer technology to protect crops and business, or use prior versions. Mark Patrick, chief financial officer of agro-chemical giant Syngenta AG said:
“Couple that with less acres, you’ve got a very acute pressure going on at the moment.”
Net farm income last year came in at about half of the $123 billion earned in 2013. Curt Hudnutt, head of North American rural banking for Rabobank said:
“If you want to liken it to the 2008 recession from a housing perspective, it’s similar to that and it’s really vulnerable to any disruptions.'’