Controlling costs is crucial to a farm's financial success, considering input costs have skyrocketed.
Barrett says the cost per acre to raise corn is more than $730 an acre, up $100 from 2011. It cost NFBI clients an average of $3.95 to raise a bushel of corn in 2012, but Barrett says many producers were well above or below that average.
While net farm worth continues to increase, total debt also is going up. From 2011 to 2012, the increase in debt was more than $125,000 per farm. Barrett says higher debt isn't necessarily a bad thing. "But if profits tighten in the future, especially without a drop in family living costs, there will be a major squeeze on the amount available to make the payments on this rapidly increasing level of debt."
Barrett issued this caution: after seven years of great prosperity in Nebraska, the health of the average Nebraska farm has improved. "Hopefully, it has been enough to withstand a few tough years when we're faced with them."
Back to the irrigation scenario.
While Nebraska is blessed with a great supply of groundwater, enough to make it the No. 1 irrigated state in the nation, aquifer declines were considerable in parts of the state last year. And for much of the central and western parts of the state, this spring's precipitation was less than folks in eastern Nebraska realize. So those groundwater declines could well continue.
In parts of Nebraska, the drop in groundwater levels led to water conflicts between irrigators and domestic well owners. Additional regulations on groundwater pumping are not out of the question.