Numbers tell a story but maybe not the whole story. In July and August 2024, Auburn University’s Department of Agricultural Economics & Rural Sociology held 11 focus groups in Alabama with 115 farmers, agribusiness owners, employees, processors, manufacturers and agricultural lenders. Mykel Taylor, interim department head, and Kelli Russell, assistant Extension professor, led the effort to gather firsthand perspectives on agriculture and economic development in words and not just numbers.
What they heard was an “earful” about profitability overall. The sentiment echoed across the group is, “If it’s not worth doing, why are you going to spend the resources and all your energy just to be at a breakeven point or barely pay the bills?”
The most common factors affecting profitability are as follows:
■ Rising input costs and decreasing commodity prices. The inverted relationship between these and the impact on profitability is a critical stressor for farmers.
■ Equipment costs are skyrocketing with inflation. The high cost of specific, necessary equipment limits farmers from diversifying as their equipment purchases tie them to particular commodities.
■ Increasing transportation costs and freight charges. The escalation in costs related to shipping commodities compounds the negative impact on profitability.
■ Rising farmland values and rental rates. Expenses related to land are a concern now for profitability, and it is expected to be more so in the future.
■ Labor availability and costs. Regardless of commodity, all producers stated that labor issues directly impact profitability.
The authors say this documentation is a good first step in informing decision makers of what is unique about agriculture and how those in the industry perceive the likelihood of continuing their operations with the next generation of producers.