Indiana farmer, ag expert discuss impact of inflation, tariffs on industry
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowAround Indiana, Hoosier farmers are getting out their equipment and preparing to plant the next batch of corn, soybeans and other crops.
Indiana is among the top ten agricultural states in the country, and officials are keeping an eye on several factors that could impact the state’s ag sector. “Agriculture in Indiana is super important, and it’s really valuable to our state,” Don Lamb said. “The crops that we grow get to be a piece of that.”
Lamb is a second-generation farmer at Lamb Farms in Boone County alongside his dad, brother and two nephews. He’s also director of the Indiana State Department of Agriculture.
“As far as the state of agriculture right now, it’s really hard because we’re price takers, so when we think about commodity prices, we can’t set the price for our product. We take what the market gives us,” Lamb said during an interview with Inside INdiana Business. “Right now, because of really supply and demand factors, we’ve got low prices, and also we’ve got inflation, and also we’ve got high interest rates. So the factors that all kind of need to be on the same side of the equation are working against each other right now.”
Lamb Farms owns 3,200 acres and rents an additional 6,000 to produce dozens of varieties of corn, popcorn, corn seed, wheat and soybeans.
Lamb says currently, farmers are having a hard time calculating what the next year will look like.
“You’re projecting what you’re going to make off this crop that you haven’t even planted yet, and you’re hoping that something changes before you harvest it, because right now it’s really hard to project a profit,” Lamb said. “[Inflation] is a huge part of the equation. Everything has gone up so much for a farmer.”
Rising input costs for things like fuel and fertilizer are making it harder for Hoosier farmers to turn a profit.
“Everything builds on itself when it comes to those input costs. If it’s fuel, it affects everything: it affects the price of seed, it affects the price of fertilizer. It’s hard to find an input in agriculture right now that’s either steady or going down,” Lamb said.
Aside from inflation, there is also concern about potential tariffs. China imports more Indiana soybeans than any other country and Mexico is the biggest importer of Hoosier corn.
“It’s not a process of if we produce more…we’ve got a pricing problem,” Chad Michael Fiechter, an assistant professor in Purdue’s agricultural economics department, said. “In the short term, it’s hard to imagine a world where those tariffs are a positive in supporting price, but we don’t know.”
The latest Purdue University/CME Group Ag Economy Barometer found agriculture producers across the United States are showing continued optimism about their farm operations.
The latest survey was conducted between Feb. 10-14. A growing number of producers also expressed concern over the potential for a trade war that could result in a significant decrease in U.S. ag exports.
Nearly half of respondents said that a trade war is either likely or very likely.
Lamb remains optimistic for both his farm and the industry.
“The Indiana farmers can be competitive with anybody in the world at growing crops, and we do livestock really well in Indiana too,” Lamb said. “The other thing about Indiana that’s interesting is we are really good at adding value to our crops…What really has to change? It’s really supply and demand. We need there to be a demand for our product that’s different than it is today.”
READ MORE: Trump’s tariff war putting Indiana corn, soybean growers on edge