By Jim Suhr
ST. LOUIS (AP) - While much of America worries about the possibility of a double-dip recession, U.S. farmers are enjoying their best year in decades, thanks to high prices for many crops, livestock and farmland and strong global demand for corn used in making ethanol.
Farm profits are expected to spike by 28% this year to $100.9 billion, and the amount of cash farms have available to pay bills also is expected to top $100 billion - the first time both measures have done so, according to the U.S. Department of Agriculture. All the while, crop sales are expected to pass the $200 billion mark for the first time in U.S. history, and double-digit increases are expected in livestock sales.
Analysts widely trumpet "the new normal" in U.S. agriculture: Demand in China, India and other developing countries for U.S. agricultural exports - and hunger for corn for ethanol - has been keeping prices high and farming profitable.
In Illinois, Dale Hadden estimated his corn and soybeans were worth 10% to 15% more than in previous years, amounting to tens of thousands of dollars. He spent a chunk of that on an advance full-year payment on a seven-year loan on one of his tractors and to pay down debt on land.
Much of the rest he cautiously set aside.
"It was a successful year," said Hadden. "But most farmers would tell you that just because you're flush with cash, you don't spend it all."
In Oregon, Warren Haught sure didn't. With four decades of farming experience, Haught - hit by the high cost of electricity to irrigate crops in high desert country - sold his operation a couple of years ago. He pocketed $1.7 million on the land sale and $300,000 from liquidating everything from haying equipment to plows and tractors, using some of proceeds on two new homes - one of him, the other for his son and his family - while saving much of the rest.
"It was a pretty good deal at the time," said Haught, who now grows alfalfa and grass crops on a far smaller plot. He'd like to get at least 100 more acres, saying demand for hay in China and other Pacific Rim countries is boosting prices.
"It was kind of the perfect storm - what you had this year brought a good price," he said. "Everything seemed to be a good price."