Recession jabs at rural Nebraska

LINCOLN — Nebraska's agricultural base might have buffered the state's economy from the worst effects of the recession, but farm country nonetheless has felt the pains of the economic downturn.

Max Waldo, whose family has raised hogs near DeWitt for more than a century, said livestock farmers are pinched by rising feed costs for their animals and reduced meat purchases as consumers try to balance their budgets.

This year's Nebraska Rural Poll, a survey of 2,852 households conducted in March and April, showed that rural residents were not immune from the economic downturn.

“There's this kind of myth out there that rural folks slide through a recession more easily,” said Randolph L. Cantrell, a rural sociologist at the University of Nebraska-Lincoln and one of the researchers who conducted the poll.

According to the survey, someone had lost a job in 11 percent of responding households with employed persons. About 35 percent reported a cutback in work hours for household members. About 27 percent said someone in the household had taken an additional job to augment income.

With the closure of the former Vise Grip factory, the DeWitt area experienced manufacturing layoffs firsthand.

“It's still a good community, yet there's so few people here that have a nice income,” Waldo said. “There may be two salaries per household, but neither is a particularly good income. There isn't enough money left over to paint the house or treat the lawn, or those kinds of things. It takes its toll.”

He said the swine industry has been unprofitable for most of the past two years.

Those hardest hit have been truck drivers, factory workers, grain elevator workers and people employed in the production, transportation and warehouse sectors, Cantrell said. Farmers and people in management were less affected. About 27 percent of households with annual incomes of less than $20,000 said they used credit cards to pay routine bills.

“That is a real red flag,” said UNL agricultural economist Bruce Johnson. “You can only do that so long and you dig yourself into a deeper hole.”

Grain farmers benefited from last year's high grain prices and increased demand for biofuel, but the livestock sector has been pounded, said Brad Lubben, a UNL agricultural economist and public policy specialist. The economy has hit dairy and pork producers most, but everything from eggs to steak has been affected, he said.

“Frankly, every species is facing real serious challenges from the drop in consumer demand,” Lubben said. “It's the entire industry and all species.”

State lawmakers should understand that no economic sector is entirely insulated from the recession, even though the state's ag-based economy seems worlds away from the real estate bubble that precipitated the recession, Lubben said.

“In the long run, agriculture can't prosper if the general economy doesn't also prosper,” he said.

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