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Wednesday, July 04, 2012

Drought, Lack of Crop Insurance, And Marketing Problems Are Only a Beginning


The 2012 drought could be taking a greater toll on Cornbelt agriculture than just withered corn and soybean fields, burned up pasture, and non-productive hay fields.  Depending on one’s circumstances, the expected diminished yields will result in a severe financial impact.  Some farmers may have adequate crop insurance, some may have inadequate crop insurance, and some may not have crop insurance at all.  If early hedges or forward contracts had been made, revenue erosion could be going further downhill, and that all leads to another very significant problem.

In the past few days, two prominent ag economists have addressed the issue of farm revenue in the wake of the drought.  <b>Purdue Economist Chris Hurt</b> <a href="" title="writes"><b>writes</b></a>, “Farmers face a double whammy if the drought persists, Hurt said. On one hand, they could fail to produce enough crops to meet their contractual obligations. On the other, they could lose additional revenue if prices rise above their locked-in rate.”   A few days later <a href="" title="University of Illinois ag economist Gary Schnitkey "><b>University of Illinois ag economist Gary Schnitkey</b> </a>said, “Farms that do not have crop insurance at high coverage levels are more at risk for low incomes. However, price increases may offset some of potential decreases in yields. This offset assumes that not much of the 2012 crop has been already priced at what could turn out to be lower prices than during the fall of 2012. As a result, farms that did not purchase crop insurance and have hedged a great deal of the 2012 crop are particularly at risk for lower incomes in 2012.”

As farmers headed into 2012, they were greeted with a USDA yield projection of 166 bushels per acre on corn, an income projection slightly lower than the 2011 record, and a weather forecast for La Nina to be replaced by El Nino.  High spring prices were hedged because everyone thought they could see high yields that would drive prices lower throughout the growing season, subsequently, many farmers planned for a good year without any weather challenges.  Then the summer of 2012 happened.

According to Hurt and Schnitkey, you could be in a severe financial pinch.  Your neighbor might be in a severe financial pinch, and many of your friends may be in that situation, although you may not be.  Depending on crop insurance choices and marketing plans, every farm will be different, and will range from a potential record income to a potential record loss.  And if the latter farmers have some high- priced land to make a payment on or high cash rents to pay, 2012 could be a financial disaster along with a crop disaster.  When one leads to another, family members and close friends need to step in to ensure there is not a family disaster if there are signs of depression and suicidal behavior.

<a href=" " title="Michigan State University Specialist Suzanne Pish "><b>Michigan State University Specialist Suzanne Pish </b></a>says, “The greater the number of signs or symptoms a farm family is experiencing, the greater your concern should be. In addition, if family members are exhibiting the following signs of depression or suicidal intent, it is important that you connect them with professional help as soon as possible. All cries for help should be taken seriously.”

Pish outlines a number of <b>signs of depression </b>which should be on the radar of farm families for either someone in their family or a friend or neighbor:
• Appearance: Sad face; slow movements; unkempt look.
• Unhappy feelings: Feeling sad, hopeless, discouraged and listless.
• Negative thoughts: "I’m a failure;" "I’m no good;" "No one cares."
• Reduced activity and pleasure in usual activities: "Doing anything is just too much of an effort."
• People problems: "I don’t want anyone to see me;" "I feel so lonely."
• Physical problems: Trouble sleeping; decreased sexual interest; headaches.
• Guilt and low self- esteem: "It’s my entire fault;" "I should be punished."

More seriously, Pish says there are <b>signs of suicidal intent</b>:
• Anxiety or depression:  Severe, intense feelings of anxiety or depression.
• Withdrawal or isolation: Withdrawn; alone; lack of friends and supports.
• Helpless and hopeless: Sense of complete powerlessness; a hopeless feeling.
• Alcohol abuse: There is often a link between alcoholism and suicide.
• Previous suicidal attempts: May have been previous attempts of low to high lethality.
• Suicidal plan: Frequent or constant thoughts with a specific plan in mind.
• Cries for help: Making a will; giving possessions away; making statements such as "I’m calling it quits," or "Maybe my family would be better off without me."

When any of those symptoms are detected, Pish says it is urgent that the person seek help or be urged to seek help.  You can assist by being familiar with service agencies in your community.  Urge the victim of depression or potential suicide to talk to a professional.  If the individual or the family is unwilling to discuss their situation or seek help, then alert the agency.  Provide necessary and important information and ask what follow up action they will take.

Poor yields from the drought can quickly lead to severe financial pressure in a farm family and that can take on new manifestations related to depression and potential suicide.  Family members should be alert for changes in personality of their relatives, as well as neighbors and friends.  Take action to get them help, either voluntarily or indirectly.



Posted by Stu Ellis on 07/04 at 02:51 PM | Permalink

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