Farmers’ Financial Struggles Extend from Kansas Wheat Fields to Main Streets – Reuters

By Heather Schlitz

SMITH CENTER, Kansas – In a small town surrounded by vast wheat fields, Brady Peterson’s restaurant is nearly empty during what should be a busy Saturday lunch hour. Normally, Pete’s would be bustling with farmers enjoying fried chicken and cheeseburgers, but shrinking farm incomes have taken a toll on Peterson’s business.

The decline in sales has cut his income so drastically that he struggles to run his air conditioner during the scorching Kansas summer or to afford a suit for a close friend’s funeral.

"I ended up wearing a T-shirt I wear to work and a nice pair of jeans," Peterson shared.

U.S. farm incomes are expected to plummet in 2024 due to falling commodity prices, reduced government support, and rising borrowing and labor costs, causing economic distress to move from rural areas to Main Street.

The situation for farmers in the prairie states is particularly dire. They are grappling with the worst economic conditions in over a decade, with predictions that small towns could risk becoming ghost towns. This assessment comes from interviews with ten local business owners, directors of two chambers of commerce, two economists, and three farmers in Kansas.

Several business owners reported a revenue decline of 20% to 30% compared to the previous year. Nationally, farm income is projected to drop by 25% from last year, marking the largest annual decrease in dollar terms.

"We’re a farming community, and the farmers just don’t have the money to spend," said Megan Jensen, owner of a pet grooming salon in Concordia, Kansas, expressing her despair. "Every penny I own is invested in this. If I fail, I’m homeless."

U.S. farm income reached a record high in 2022, but a sharp decline in commodity prices, driven by large harvests in South America and decreased demand from importers, has devastated U.S. farmers. Currently, futures for corn, soy, and wheat are trading at around three-year lows.

Farm income in Kansas and other prairie regions is expected to hit its lowest level since at least 2010, as reported by the U.S. Department of Agriculture. Being the largest wheat-producing state, Kansas has significantly felt the nationwide downturn as demand for U.S. wheat dwindles.

Bryce Wiehl, the mayor of Smith Center, described the troubling effects on his hometown, noting an increase in foreclosures and a shrinking population. "It’s hard to find an industry that doesn’t rely on farm product prices. It has a dramatic impact on the community."

Rural downtowns in Kansas are scattered with closed businesses, and residents have observed empty streets like never before. "Things are incredibly volatile here. It’s either feast or famine," remarked Shane Wyatt, who owns a gun shop in Norton, Kansas. "I wouldn’t quite call it a ghost town, but you can really see the impact of the low prices."

Even as the broader U.S. economy shows growth, a report from Creighton University indicated that the rural Main Street economy in the Midwest and Great Plains has weakened due to declining sales of farm equipment and the first drop in agricultural land prices in five years.

Russ Erbert, a jeweler in Norton, relishes showing young couples the brilliance of a good diamond but finds these moments less frequent amid economic strain. "Some of the young farm kids are waiting until next year to get married," he noted. "They’re budget conscious."

When customers do come in, their purchases tend to be less costly items—such as pocketknives instead of firearms or smaller gems rather than larger diamonds. Many residents are resorting to pawning possessions for quick cash, with fewer returning to reclaim their items.

High inflation and rising interest rates have hit farmers particularly hard since they rely on short-term, variable-rate loans for essentials like seeds and machinery. Business owners are under similar pressure from inflation but hesitate to raise prices, fearing that even a slight increase could alienate customers.

"I feel like I have to work three times harder to earn the same amount," said Tammy Britt, who owns a soda fountain and gift shop in Concordia.

Some community members are experiencing health issues due to the stress and relentless demands of their work. "There are days when the pressure builds up, and you want to pull your hair out," Peterson admitted. "Sometimes you have to run to the back and scream a little, but you’ve got to be optimistic."