The Rising Cost Conundrum: How Inflation is Squeezing Out Future Farmers

Small to mid-size farms across the U.S. are feeling the pinch of inflation, which is squeezing their profits and presenting a significant obstacle for those looking to enter the agricultural industry. The impact of inflation on these farms is dire, with some facing the real threat of closure, potentially ending a long lineage of family farming traditions. Andrew Boerding, a sixth-generation farmer at Boerding Farm, expressed his concerns, stating, “I might be the generation that loses [the farm]. Not just my fault, but just the world around me might change that much that I can’t hold on to anymore.” The sentiments shared by Andrew echo the sentiments of many small farm owners who are grappling with the harsh realities of rising costs in the industry.

The Boerding family’s struggles are not unique, with Jim Boerding emphasizing the stark difference in farming costs between his generation and his father’s era. Jim noted, “My dad retired about 20 years ago, and he just can’t believe what things cost anymore compared to when he was farming.” The escalating input costs, including fuel and machinery expenses, coupled with the ripple effect of rising grain prices, are making it increasingly challenging for small farms to remain financially viable in today’s economic landscape.

In California, a newly enacted law is adding to the financial burdens faced by small pork producers, further squeezing profit margins for mom-and-pop operations. Meanwhile, in St. Charles, Missouri, the escalating average U.S. farm real estate value, which reached $4,080 per acre in 2023, represents a $280 increase per acre, making it particularly difficult for farms to expand and thrive. The president of the Missouri Farm Bureau highlighted these challenges, underscoring the uphill battle that farmers are currently facing.

The American beef industry is also grappling with its own set of challenges, as per the USDA’s report indicating a record low. With a 7% decline in the number of family farms across the United States, the industry is witnessing a significant transformation. Mark Hawkins pointed out the difficulties in sustaining family-owned farms and the barriers that new farmers encounter when trying to establish themselves in the industry. In Missouri, efforts are underway to support the next generation of farmers through legislation aimed at incentivizing new farmers and facilitating the transition of retiring farmers.

As the landscape of agriculture continues to evolve, the resilience of family-owned farms is being put to the test. The combination of inflation, rising costs, and industry challenges is reshaping the agricultural sector, making it increasingly difficult for small and mid-size farms to survive and thrive. The future of farming in the U.S. hinges on finding sustainable solutions to support these vital contributors to the nation’s food supply chain.