U.S. farmers confront soaring diesel prices and rising bankruptcy risk
Record diesel costs, higher fertilizer prices and tighter credit are pushing many American farms toward loss, with several farmers fearing they cannot sustain operations.
Illinois farmer John Yeley, who has run his family’s seventh-generation farm since 1997, says the current economic climate makes it hard to envision his teenage children taking over. > "Right now, the way all of this is now, no, I wouldn’t wish it on them," he told reporters.
Across the Midwest, diesel – the primary fuel for tractors and combines – has surged to about $6.80 a gallon, near an all-time high. Yeley, who typically purchases 8,500 gallons twice a year, now buys fuel in smaller batches, hoping for a price drop that has not materialized. He warns that three farmers in his county have already gone out of business this year.
California grower Sammy Tookey, who cultivates a variety of vegetables on 10 acres, faces similar pressures from rising diesel, fertilizer and packaging costs. He has raised prices modestly but worries about losing customers and the long-term viability of his farm as he prepares for a family of his own. > "Being able to have a family and a farm seems almost impossible," he said.
Industry experts point to a combination of factors tightening farm margins: higher interest rates on short-term loans, reduced access to export markets due to trade disputes, and fertilizer price spikes linked to the wars in Ukraine and the Middle East. Aaron Lehman, president of the Iowa Farmers Union, said most farms are expected to lose money this year, a trend that threatens creditworthiness and future borrowing capacity.
Federal bankruptcy filings for farms rose 20 % in the year ending June, and attorneys warn the trend could accelerate as the growing season progresses. Lawmaker proposals, including a potential ban on U.S. diesel exports and a new farm bill that would raise loan limits, are being debated, but analysts doubt immediate relief for producers already in the field.
Farmers say they feel caught in a cycle of global events and policy decisions that are beyond their control, adding to the stress of an already unpredictable occupation.