Farmers prospering across the Midlands

Steve Kenkel of Earling, Iowa, is a farmer, just like his father and grandfather before him.

But the way he makes his living is far different.

He uses implements with global positioning systems to precisely tailor his application of seeds, fertilizer and herbicide.

He buys genetically modified seed that costs $240 a bag but reduces the need for tilling and herbicide while increasing his yield.

He prepares a detailed marketing plan in which he sells much of his crop even before it’s planted.

Not to mention his off-farm job at the city water department in nearby Harlan.

“The older generation, most of their operation was based on sweat and back labor,” Kenkel said.

“The thing I tell the younger guys starting out is that there’s more money to be made in farming today by sitting at the kitchen table working on a marketing plan than by working in your shop to get that extra bushel from your equipment.”

Today marks National Agriculture Day, the culmination of a week of activities recognizing farming’s economic impact. This year’s event comes as Nebraska and Iowa farmers have enjoyed record prosperity in recent years.

Farm products represented about 6.5 percent of the gross domestic product of both states in 2008, said Creighton University economist Ernie Goss. That’s not counting the output of other industries that depend on farming, from center-pivot manufacturers to meatpacking plants.

According to the Economic Research Service of the U.S. Department of Agriculture, Nebraska farmers received $17.3 billion for all commodities in 2008, while Iowa farmers collected $24.7 billion.

It was the second straight year of two significantly profitable years for grain farmers, although livestock farmers were pinched by high feed costs and low prices for their animals.

Adjusted for inflation, annual cash receipts in Nebraska’s farm sector leapt by 17 percent in 2007 and by 12 percent in 2008. Overall, it was a 31 percent boost in just two years. Iowa’s cash receipts ballooned by 52 percent, adjusted for inflation, during the same period.

The coming years won’t be quite so flush.

Preliminary figures from the Economic Research Service indicate that nationally, farm cash receipts dropped by nearly 40 percent in 2009.

That sounds dismal, but the agriculture sector as a whole still would remain ahead of where it stood in 2006. The federal government forecasts a 5.5 percent increase for 2010.

“We’ve had a really good run in the last five or six years,” said Brad Lubben, an agricultural economist at the University of Nebraska-Lincoln. “While 2009 was down substantially, it fell back only to an average net income level.”

Greg Ibach, director of the Nebraska Department of Agriculture, said global demand should continue to fuel Nebraska’s ag industry and with it, the state economy as a whole.

“I think it’s a good time to be a farmer in Nebraska,” he said. “Nebraska has a lot of things going for it.”

Both states have fewer farms than in the past.

According to the USDA, Nebraska has lost 17 percent of its farms since 1990, dropping from 57,000 in 1990 to 47,200 last year. Iowa has 11 percent fewer farms than in 2000.

Both states, however, are seeing increases in the numbers of very large and very small farms.

Nebraska has seen significant growth since 2000 in the number of farms with at least $500,000 in revenue each year.

In 2009, 7,500 farms 16 percent of Nebraska’s total collected more than $500,000 in receipts. Only 5 percent of the state’s farms exceeded the half-million mark in 2000.

Lubben said the figures reflect increased consolidation in agriculture, a trend that began almost as soon as the frontier was settled.

“Nationwide, 20 percent of farms produce 85 percent of agricultural production,” he said.

On the other end of the scale are a growing number of niche operations like organic farms and direct market farms, such as pumpkin or strawberry patches, as well as part-time and “lifestyle” farms run by people who make their main living at an off-farm job.

“In between, we don’t have many at all,” Lubben said. “The middle is dropping out.”

Kenkel, 51, who farms 550 acres of corn and soybeans, has spent his farming career also working at an off-farm job.

“There’s a few of the bigger guys that farm 2,000 to 4,000 acres, but the majority of the guys either are in a big operation with their family or they’re like me, they farm 400 to 600 acres and they have another job,” he said.

Kenkel also is something of a farm historian. He collects antique machinery and plants plots of old-style corn seed to demonstrate changes in farm technology.

He decided this year to begin turning over his operation to a neighbor’s 21-year-old son, who is eager to become a farmer.

Brian Grote said that with Kenkel’s help, he’s starting out with a total of 900 acres plus a 200-head cow-calf operation and a summer construction business shingling roofs.

“It’s my only future, that’s what I’m banking on,” he said. “I’ve got farming in my blood. I don’t see any other path I want to take.”

Contact the writer:

402-473-9581, leslie.reed@owh.com

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