Drought of 2012 drains the pockets of Minnesota farmers

Many farmers are suffering financially in Minnesota and across the rest of the United States. According to the Star Tribune, Minnesota hog producers are losing about $20 to $25 per pig right now. Moreover, business is also down for turkey growers, dairy producers and cattle farmers.

Why is the farming industry suffering? The depletion in farming profits is related to the recent national drought. When your income depends almost entirely on the weather, some things are left out of your control.

Due to the drought of 2012, many Minnesota farmers produced limited amounts of grain this past year. As a result, grain prices have spiked, affecting many other facets of the farming trade. Animal farms require feed, which is the primary cost in raising livestock and the main food source for these animals comes from corn and soybeans.

The Star Tribune reports that corn and soybean prices rose respectively from about $5.50 and $13 a bushel in June 2012 to over $8 and $17 in August 2012 - the peak of the drought. Even though corn and soybean prices have reduced in recent months, they are still at a historical high, with corn around $7.50 per bushel and soybeans at nearly $15.

The Star Tribune explains that grain products make up about 60 percent of hog-raising costs, and Minnesota is the nation's third-largest hog producer. Furthermore, the state is the largest producer of turkeys. Compared to hogs, feed makes up about 70 percent of a turkey grower's cost. According to a veteran turkey grower out of Little Falls, Minnesota, "Feed is a horrendous amount of our expense." He adds that with feed prices up 30 percent since the beginning of 2012, his business is suffering severely.

Dairy farmers and cow-calf operations in Minnesota are also suffering from the drought. Cows need roughage, which often comes in the form of alfalfa or corn silage. The lack of supply means fewer feeding options for these animals.

In addition to Minnesota, the drought has affected farming resources in many parts of the country. DL-Online.com reports that the lack of rain raised feed prices so much in California that 150 dairy farmers are expected to declare bankruptcy in January 2013.

This recovery strategy is a viable option for Minnesota farmers, too. Farmers that have suffered severely from the dryer season may consider personal or business bankruptcy. However, your debt-reducing options depend on your unique needs. For example, do you operate a family farm? Is your farm is a corporate business? Depending on your particular situation, Chapter 12, Chapter 13 or Chapter 7 bankruptcy could help hydrate your pockets.

The drought may have affected your business this year; however, if it has put you in a financial hole, there are ways to dig yourself out. If you would like to learn more about your options, you should speak to an experienced bankruptcy attorney.