Indiana's farmers worried that late summer droughts would decrease profits and hurt their bottom lines. They were wrong.
Chris Hurt, Purdue agricultural economist, estimates that 2010 farm income in Indiana will rise by about $500 million from last year to top $3 billion. Worldwide demand for grain has grown recently, making American grains more competitive and valuable. Hurt believes that grains prices are "extraordinarily high" right now, indicating "good times for crop incomes." Luckily, the drought had a minimal effect on crop yields.
The extra income farmers stand to receive will have long-term benefits. With worldwide demand growing for food as developing nations like China and India expand rapidly, farmers have reason to make investments in infrastructure and equipment – important to driving future growth. Used tractors will be replaced by new ones and an old "barn gets painted that hasn't been painted in years," Hurt said.
Not all farmers, however, will profit. Some, skeptical of their growth prospects, sold their crops in advanced contracts at locked-in prices, effectively preventing them from enjoying the robust returns other farmers are seeing. Either way, the higher farming income bodes well for farmers across the country.
Indiana's farming income rises
Economists forecast that farming income in Indiana will rise this year.