Livestock producers were first hit by high feed costs and now by the weakening U.S. and world economy. Cattle feeders reportedly have two years of red ink under their belts and recent estimates show hogs in the red zone by about $15/cwt. With milk prices at almost half the level seen 18 months ago, producers are feeling the pain. And that's bad for the country, says dairy producer Cynthia Bissell.
"Rural America is borrowing up a storm for operating expenses,” she notes. "When you borrow for operating costs, you will never recoup the money, let alone the interest on top of it. Capital expenses such as cows, seed or building can present certain efficiencies and/or added income which will make that loan worth while but borrowing for operating expenses never makes sense,” she says. "We will be out of business if the economy does not improve to the point of fair market value for product so as to allow the farmer to save and invest.”
"Saving and investing makes a country strong; borrowing makes the economy weak,” she adds. "When we begin as a nation to put off things we want to save for things we need, then the economy will begin to rebound as confidence is restored in one's ability to survive. Banks would do well as they invested the money that people were saving.”