October 1984
The Sower
Page 7
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High Interest rates
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Two hundred pairs of eyes y ten intently as the fast-talking auctioneer
fires bids into a microphone. His plaintive voice bounces off the bidders
standing among flatbeds stacked with memories.
Away from the crowd, Bob and lavina Ramge watch the proceedings
with mixed emotions.
Brooding gray clouds match the farm couple's dismal oood as the
auaioneer sells much of what tey had worked a lifetime to accumulate.
"It makes you feel kind of sad," Ramge said. "A fella has a lot of
memories with this stuff."
Ramge waved a calloused hand at a 1929 cornpicker that belonged to
his father. He said he remembered rashingfire extinguishers to thefield
when the pickr caught on fire.
Ramge 64, has lived in tlie same house on the 320-acre Plattsmouth
farm all his life. His father started farming the ground in 1917. That
family tie to the land won't be broken, he said
"I'm staying 'til I die," be said,
Before they retired earlier this year, the couple milked a 75-cow dairy
herd for 42 years. Range said his fasih's herd was the largest milk
producer in the Omaha area. He sold the herd 10 years ago when his son,
Bruce, took a job for the state aad moved avay. Ramge couldn't do the
work alone.
This year, Ramge said, he rented the farm to a local farmer foousc
there was "nobody to take my place." That's why the couple decided to
sell the machinery, tfM and some household items.
"I feel like it's the"! "'sgtodo " Mrs. Rungjesdd But sie said the
sight of her children'! .. auction block tugged at her heart
The farm economy l n' '-"e started farming wth
father. "There isn't any "
But Ramge said he dotw
blood. He still owns 18 cattk
As interest rates climb and farm prices
drop, farmers who depend on borrowed
funds may be living on borrowed time.
By January 1983, Nebraska's farm debt
was sixth highest in the nation. If divided
equally among the state's fanners, each
would owe $177,200.
"This winter is going to be a very
difficult time for a lot of people," said Doug
Jose, UNL agriculture economics professor.
"This fall, grain prices have dropped a little,
and I think interest rates will remain high.
"And, I think the land value maybe
hasn't reached bottom yet."
The Nebraska Department of Agriculture
calculates farm debt by comparing farmers'
dehfcj to their assets. Nebraska's farm ripht
was 28 percent of farm 2ssets in January
1983, according to the most recent statistics.
Nebraska ranks second nationally behind
South Dakota's 28.3 percent farm debt
Many Nebraskans are keeping their heads
above water. More than half are under 10
percent in farm debt
But a growing number of the slates
farmers are in deep trouble. U.S. govern
ment statistics show 19 percent are in
moderate to severe financial stress a
farm debt of 41 percent or more.
Nearly 1 2,000 farmers in this state must
ask themselves one question; why do we
owe so much money? &
High farm prices sad fcs J tvk?s r: ,y"
farmers to get loans & fcwsrt in ir
systems, Josessii la new, tf" "
prices in dn; pjrgkrJvsi;.1 "
farmers kcq i '
up to nearly 22 percent."
Jose said farm loan interest rates, which
stood at 13 percent in early October, may
cause 10 percent of Nebraska farmers to
lose their loans in the near future.
"That doesn't mean we're going to have
10 percent of our farmers sell out," he said.
farm department sales have been lagging.
"I've seen a large difference," he said.
"Farmers are just buying the things they
need. They aren't buying the large dollar
items. They buy repair tools, so they can
keep their old machinery going."
Haxton speaks from experience. He said
he farmed in Kansas for several years
before going broke.
"The first three years, I was breaking
even, but then my income didn't keep up
with my debt," he said. "I had a big sale and
got rid of everything"
Haxton is not alone.
But don't toll the death knell for
Nebraska's farmers not just yet. Even
the experts see reason to hope.
Jose said economists have projected
some price improvement for next spring.
wSSSSZZSZZSTZZSZ ) And FBLA's Frantke said the land value
But some will. Farm sales are not decline has lessened in the eastern corn
uncommon in Nebraska these days. Govern- belt, especially in Indiana, Ohio and Illinois,
ment agencies don't keep track of farm "If the land value trends follow a
sales, but statistics show the number of western path, as they have in the past, land
'Tamers are just buying
the things they need . . .
they buy repair tools, so
they can keep their old
machinery going'
it?:
has
J. loans
Francke,
r
keep his foot in the door.
"I've been running cattle all my life ai.w,
said.
Rame? waesed his head at an old two-seated bueey that long ago lost
its paint. He said he had owned it for over 40 years. He had never taken it 5ven to l u yes
nut for 2 ride hut Ramee said he hated to part with it. 8 percent ot tneir a
out for a ride, but Ramge said he hated to part
His mood lightened some, watching the crowd
follow the auctioneer like a herd of sheep, feeling the
warm mid-day sun melt away the clouds. He said he
was satisfied with the day's outcome. After all, he said,
"money's scarce."
He surveyed the farmers wearing seed corn caps,
young mothers, trailing toddlers and city slickers
dressed in their best western duds. Each one seemed
to be waiting impatiently for something to be sold.
"One-fifty-any-one-fifty-five. One fifty once, one
fifty twice, goin', goin', SOLD . . ." -k
Suzanne Teten
,xtor.
a payment was
r Ji of FLBA's farm
2.42 percent in 1983
1981.
A to keep in mind that it's
cent of over 70,000 loans."
That's still a pretty good record."
raskans may not be able to maintain
.iit record, however. Francke said loan
interest payments are taking an increasing
share of farmers' production costs.
"Seven to 1 0 years ago, it was only about
costs, she said. Now its
farms is decreasing.
State figures placed the number of
Nebraska farms at 67,000 in 1975. By 1982,
Viat figure had dropped to 63,000.
Farm size went up, from 715 to 756
i Vs. Big farmers are getting bigger
I le small farmers are selling out. And
hg out is still a last-resort move.
When land comes up for sale, the
rket demand just isn't there," Jose said,
id when there's no demand for md, land
Jues fall.
Land values plummeted in Nebraska
during the past two years. Nebraska Depart
ment of Agriculture statistics show average
farm land values dropped from $626 per
acre in 1582 to $495 per acre in 1984
Machinery values tock the plunge ss
well. More farm sales glutted the market
with used machinery, and demand is low.
. Marion Frantz, owner of Frantz Farm
Equipment, Inc., in Seward, said business
slumped during the last three years.
"We've gotten stuck with heavier in
ventories," he said. think everybody in
the business is hurting some."
Frantz sail used machinery glut has
made it harden v farmers to buy equip
ment Low dt Jmv rnc ry
values mean lows
Dennis Haxton,
Wheelers, Inc., in Linco
values will stabilize in Nebraska," she said.
"Farmers will have more borrowing power."
Until then . . . Nebraska's farmers may
have to settle for borrowed time.
1
Jim Rasmussen
is
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FARMLAND VALUE CHANGE (Percentage)
April 1983 to April 1984
Nebraska declined the most: 12 percent
Suzanne TetenThe Sower