Paul Neiffer is a farm boy by birth. As an adult, he now owns farms in three states. So, he still believes in the future of farmland. But he also believes that the next several years could be difficult for the farmers he serves.
“The psyche right now (for farmers) is this year really is not great,” Neiffer said from his office in Colorado.
Neiffer is a certified public accountant who specializes in taxes and accounting services for farmers and agricultural processors. He authors the Farm CPA Report, contributes to several agricultural-focused productions, and travels across the country to share his expertise with farmers and agricultural organizations.
Paul Neiffer biography
Former Principal at CliftonLarsonAllen LLP
Author, Farm CPA Report
Top Producer contributor
RFD TV contributor
Neiffer entered the business in the 1980s during the Farm Crisis, so he has perspective on what struggles are like.
He cautions people – especially those outside of the agricultural industry – not to overblow dropping income projections for farmers in 2024. “I think we've got to remember we were coming from an artificially high number in 2022. You know, the Ukraine crisis just bumped up farm income dramatically,” Neiffer said.
Russia’s invasion on Ukraine caused severe damage to Ukraine’s agricultural industry. Some American producers benefited from the decreased global competition.
Center for Strategic & International Studies Global Food and Water Security Program Director Caitlin Welsh and Senior Adviser Joseph Glauber wrote in 2022 about the damage that Russia’s attack was doing on Ukraine agriculture:
“Russia’s war in Ukraine has caused the greatest military-related disruption to global agricultural markets in at least a century. Ukraine’s agricultural sector has been a major front in Russia’s war since February 2022, and the primary purpose of Russia’s targeting of Ukraine’s agricultural infrastructure is likely to undercut a main source of Ukraine’s income.”
Wheat, barley, and sunflower seed production all suffered there because of Russia.
Farm incomes in the United States fell in 2023 compared to 2022 and are predicted by the USDA to fall another 25% this year. “Us coming down 10, 20%, 30%,” Neiffer said, “I don’t have a problem with that. I think most farmers don’t have a problem with it.”
He knows, of course, farmers would rather see their incomes rising 10,20 or 30% rather than falling. But they know incomes fluctuate. It is the pain ahead that will sting more.
“Next year looks a lot worse. Right now, we’re looking at still high input costs and lower, lower prices,” Neiffer lamented.
RELATED: Inflationary pressures, higher interest rates, supply chain disruptions, and lower commodity prices have pressured profit margins. FarmProgress looked at the widening margins between crop output prices and input prices. Read that report here.
Neiffer sees a comparison with a decade ago. “If you look at the futures prices, it’s almost a mirror image,” he explained.
RELATED: Farm Aid, the non-profit led by music icon Willie Nelson and others to support struggling farmers, described how tough it was for many farmers in the mid-2010s as incomes fell 45% over three years. Find out why the environment was so difficult for farmers in this article.
Because of 2024’s similarities to 2014, Neiffer thinks that income declines for farmers could also bring a repeat of a multi-year struggle. “I think for the next five years or more, it's going to be tough.”
And those tough times will force some farmers out. “There'll be some weak farmers that will be cycled out of this. I mean, I hate to say it…but you know it's going to happen, especially if they used up a lot of their excess liquidity built up in 22 and 23 on buying toys, so to speak.”
“That's where it's really going to hurt them,” Neiffer said.
He doesn’t sugarcoat what could be a rough stretch ahead, but he remains confident in farmland’s potential. Part of it is guided by the nostalgia he feels about the feel of the land.
“You’re always going to have some lean years,” Neiffer said and then reflected on Genesis 41. “Let’s go back to the famous Bible verse…seven good years, followed by seven lean years.”
“Farmers understand that they take advantage of those very good years to get through the lean years. And when they come out the other end, they’ll be better off than when they started,” he said.
“So, I’m very optimistic.”
