Dryness, tighter margins likely to squeeze some farmers in 2022
A commodities financial expert says drought conditions in the Western Corn Belt and beyond have some farmers less optimistic for planting.
“Everybody’s looking for just a little more moisture before they plant.”
Curt Covington, Senior Director of Institutional Credit, with AgAmerica tells Brownfield the lack of moisture is out of farmers’ control in those regions, and many are moving ahead with the hopes the rain will come.
“It’s going to be interesting to see how things start to turn out as things get closer to April, May, and June whether or not some of these crops can actually be grown,” he says.
The latest U.S. Drought Monitor report shows more than 70 percent of the contiguous U.S. is experiencing some form of drought, with 40 percent of the Midwest and nearly 90 percent of the High Plains reporting dryness.
“I think topline revenue is certainly going to be there, but the margins may not be what everybody anticipated perhaps even 45-60 days ago before the Ukrainian incident,” he shares.
He’s encouraging growers to also be mindful of rising interest rates which are expected to add to already high input costs on the balance sheets this season.