The USDA’s recent estimate of a 36-percent decline in net farm income from 2014 to 2015 due to low grain prices has the agriculture sector on edge. Thomas Landstreet, a co-founder of investment-management firm Tell-tale Advisors, argued in Forbes that agriculture has been in a long-term bubble caused by the corn ethanol mandate, which drove demand, and the 2012 drought, which tightened supply. He writes, “We’re at the beginning of a multi-year retrenchment [collapse in prices] in the agriculture sector.”
DTN/Progressive Farmer editor Chris Clayton reported on Tuesday about the National Farmers Union’s request that the USDA prepare for an increase in loan and loan-guarantee applications due to the loss of income. NFU says there have been “spikes in ‘Hotline’ calls regarding financial stress.”