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The main reason for U.S. farmers' unlikely recovery is as familiar as the outcome is foreign. Wealthier consumers in places like China and India are eating more, and in particular they are eating more meat. The average American consumes about 250 lb. (113 kg) of meat a year. The average Indian eats less than 10 lb. (4.5 kg) a year. In China, it's more like 100 lb. (45 kg). Which means there's a lot of room for growth. Half of U.S. corn production goes to feed cattle, pigs and poultry, which drives up demand for grain. Ethanol has increased the demand for corn as well. As a result of both trends, corn prices have more than doubled in the past year, to a recent $6.81 a bushel. Soybeans, which are the U.S.'s largest farm export to China, are up too.
Meanwhile, a number of innovations have made U.S. farmers significantly more productive than they were just two decades ago. Bioengineered seeds mean they can use smaller amounts of pesticides and water. And with GPS-aided, computer-monitored planting, some farmers are able to squeeze two rows in a space not much bigger than what used to fit only one. An average acre produced 91 bushels of corn in 1980; it now produces 152. That, along with higher prices, is boosting profits and making farmland dramatically more valuable and farmers richer.
Ken Woitaszewski knows what it's like to lose the farm. In 1985 he got a call saying the bank was about to foreclose on his family's 500 acres (200 hectares) in Wood River, Neb. He was 24, married and living in a trailer. It had been years since his father's farm was able to support the family. He and his three brothers did odd jobs. Woitaszewski worked on other people's farms. He assembled farm equipment for a dealer. Two of his brothers drilled wells and installed pivots, the long-boom sprinkler systems that water most farms. Another worked as a plumber.
Woitaszewski says he had no idea how much financial trouble his father was in. "My father was very old school," he says. "Today's farmer is much more open-minded." But it was the 1980s, and rising interest rates were spelling an end to many family farms. Pooling their money, the brothers found they could save only a so-called quarter section, or 160 acres (65 hectares), of the family's land. That was the seed of their rebound. "Losing the family's land to the bank was an important experience," says Woitaszewski. "I remember lying in my trailer thinking, I will do whatever it takes not to let that happen again."
The first few years were rough for Woitaszewski. Crop prices were low, and farm profits were nonexistent. He and his brothers had to hold on to their odd jobs. To keep the farm afloat, they ran it as cheaply as possible. They built their own barns and fixed up old tractors. But as more people ran into trouble, more farms became available. Woitaszewski says an experienced farmer once told him the best way to not lose your farm to the bank is to pay for it in cash. "We were lucky," says Woitaszewski. "We didn't have a lot of equity, so we couldn't do a lot of borrowing." In 1990 the brothers bought another 120 acres and then 40 more in 1994. By then, prices had risen to nearly $2,000 an acre (almost $5,000 per hectare).
Woitaszewski and two of his brothers now farm 10,000 acres (4,000 hectares), about 60% of which they own. At the current average price of about $4,000 an acre (just under $10,000 a hectare) in Nebraska, the Woitaszewskis' land alone is worth $24 million. Back-of-the-envelope math suggests profits this year could be as high as $6 million, though Woitaszewski doubts they will hit that mark. Nonetheless, he seems somewhat amazed by his success. "We as humans possess more ability than we give ourselves credit for," he says.
John Willoughby, who owns 2,000 acres (800 hectares) in Wood River, got his start in farming in 1992, when his father-in-law retired. At the time he made the switch, he worked for a bank, and most of his clients farmers thought he was crazy. Today the move seems to have paid off. He expects his profits to be up 25% this year, and that's on top of a number of good years. A few years ago, he and his wife built a five-bedroom, five-bathroom home. They have four daughters, and Willoughby hopes to be able to send all of them to college nearly debt-free.