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Will 2009 Drive 2010 Retirements?

Folks are already speculating whether 2009’s lower profits and sheer headaches will push some farmers to retire.

So I heard it for the first time this week: one prognosticator speculating that the unduly tough conditions of 2009 will lead more farmers to retire. The speculation comes from Bill Thompson, an Avon farmer and grain systems dealer of 30-some years. He’s been around long enough to have seen cycles come and go, so he may be on to something.

“I think you’ll see some older farmers retire over this year,” Thompson says. “Those people that have been contemplating retiring for a few year now but haven’t because revenue has been real good. Profit the last few years has been better than any in his lifetime – that’s why I think you haven’t seen too many people retire in the last few years. After this year, you may see more.”

It’s an interesting analysis, and he’s right in that profits have been too good to retire from lately. 2009 was certainly the end of that cycle. Then again, I just got a press release from a farm management group asserting that even though ’09 farm profits were down, long-term profitability is still good. The cynic in me feels like they’re looking for excuses to prop up cash rents and keep off-farm investors interested. But then again, they get points for stating the obvious: so long as people keep eating, “long-term” profitability in agriculture should be just fine.

Which brings us back to retirement speculation. If lower profit won’t drive retirement, will 2009’s sheer aggravation and headaches be enough?

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