Crude oil prices impact all areas of the economy. Few people realize just how much crude oil affects farmers across the country. With lower fuel costs, farmers are able to earn higher profits on their products. There are a lot of farmers who are struggling financially right now. Commodity prices across the world have dropped, and this makes farming a difficult industry to be in right now. The good news is that crude oil prices will probably be down for a while. Over the long term, oil prices are a leading economic indicator.
Farming requires a lot of capital to get started. There are many people who have to borrow tens of thousands of dollars for a small farming operation. Farmers typically have to work long hours, and one bad season can wreck their finances. This is why so many people are getting out of farming and going into other businesses. Anyone who wants to sustain their lifestyle though farming must be prepared for all of the volatility that comes along with it. There are many people who are simply not prepared for all of the work that comes with farming. As farming continues to consolidate, many of the large farming corporations will increase their profits. Many small farmers get bought out by larger ones over time. The price of crude oil being low should help farmers across the country, but there are still many challenges ahead for this vital industry.