Why 70% of Farmers Can't Afford to Grow Food Anymore
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Summary
In this episode, we talk about the challenges farmers are facing today and how the trade war with Iran is impacting their bottom lines. Farmers are facing the worst economic downturn in a long time, and today is the worst it s been for them in a while.
Transcript
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They did a study to find out what percentage of kids under the age of 10 know where milk comes
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from. Did you know a third did not know that milk comes from cows? They thought it's just at the
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store. Do you know why? Because we have no clue what farmers do on a daily basis. You and I don't.
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We don't even think about farmers. All we think about is, why is this food so expensive? Farmers
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have become greedy. Well, we don't realize that the Strait of Hormuz challenge that's taking place
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right now. 33% of global fertilizer seaborn trade passes through the Strait of Hormuz.
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Just in 2025, you know what percentage of farmers filed bankruptcy last year?
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These people could go one, two, three, five years making nothing.
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And today, it's the worst it's been for them in a long time.
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And when we think about farmers, I think about the feeders, they feed you and I,
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and only 9% of Americans that are in farming are under the age of 35, which means what?
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Young kids are not grown up saying I want to be a farmer
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They're saying I want to grow up to be a YouTuber
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Give it a thumbs up and subscribe to the channel
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Having said that, let's get right into it. So prices of fertilizer in just the last few months
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went from $350 per ton to $600. And these farmers are being hit by it. Now, when we think about
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farmers, the shipping crisis is making your grocery prices higher, not because farmers are
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trying to explode you and I, it's because they're going through a challenging time right now. By the
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way, the average farmer, people don't know what their margins are. In a good year, farmers make
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three to 10% net profits. Average year, zero to five. Many years, they'll make nothing. Literally,
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they will make nothing many years while they're building their business. So as they're going
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through this, this is the challenge. I got four things going on. Number one, farmer's problems
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equals consumer's problems. So if you're wanting to fix your problem, we got to help the farmers out.
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Inorganic input. So fertilizer and chemical costs. That's one of the things we're talking about.
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Number two, energy costs, production and transport. That fertilizer that's coming here, that a third
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of the world's fertilizers is being done right now by China. I think 25 to 30%. You got India's
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on that list. You got Russia's on that list. You got, I think Belarus is on that list. Couple of
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these countries are on that list that we're going through. So you got production and transport. Well,
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if the Strait of Hormuz got a blockade, guess what's not coming to anybody? The fertilizer that
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you need. Number three is a geopolitical issue. Shipping wars, tariff, all of that stuff. We're
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definitely dealing with this. And a labor pool, migrant workforce, native population. Some of
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these folks that are sitting there saying, hey, I lost my workers that are willing to work on farms.
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I don't have anybody. It's kind of impacting me. We got to kind of take advantage of some of the
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people that are here. We need their help. Hey, let's bring them back. That's a whole different
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immigration issue that's impacting our farmers. Next, profit margins where they're at. Farmers
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do not benefit from higher costs. They're trapped in the inflation cycle themselves too. So meaning
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retail prices increase, are absorbed by middle market costs, packaging, processor financing,
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high interest rates labor anticipate a three percent increase in production costs for 2026
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farm profit margins are likely going through negative this year meaning farmers are probably
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making nothing in 2026 so if you look at this the farm input squeeze 2020 to 2026 fertilizer costs
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up 63 machinery up 38 fuels up 38 repairs and supplies 27 chemicals 22 they are
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having issues financially themselves producing the product that you and i need by the way when
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you think about different industries farmers are right on what kind of money they make
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row crops they make two to eight percent this is corn if you go to dairy farms zero to five percent
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they don't make a lot of margin livestock beef and poultry five to twelve percent and the ones
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that make good money is the niche markets like we got a couple farms here that we go and buy the
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eggs from there. It's organic. It's ramped typically by a family. They make 10 to 25%,
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if not higher. This is why they rely, farmers heavily rely annually on the federal government
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to give them money or else they're not going to be able to survive. You know what we paid them
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this year? 44. In 2026, I believe the budget is $44.3 billion. You know what that number was just
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10 years ago in 2016? 2016 was $12 billion. We went from 2016, 12 billion to 2026, 44.3 billion.
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because if we don't pay them, they don't make money. They leave the industry and they go to a
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complete different business. And by the way, in Florida right now where we live, since 2005,
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do you know 90% of the orange groves that we have in Florida? You know, you hear about like the
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orange bowl. Everything in Florida is about orange. Since 2005 till today, 90% of all the orange
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groves have been destroyed because there was a blithe that they claimed came from Asia. Some are
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allegedly saying this came from China, they dropped it to hurt the Florida market. Students come up
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here, they hurt the farmers, 90% in Florida, and the business is still solid, but 90% was impacted
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by. So the risk that they have, weather, conditions, all of these different things, they still get up
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every day. Just like Paul Harvey said many years ago, when he told the story of God loves farmers,
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there's a reason for it. Let me continue as we're going through this year. Imagine being a farmer
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the last six years. You dealt with COVID, all the regulations, travel, everything's shut down. Oh,
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give me a break. All I'm trying to do is make money. That hurt them. Ukraine, 2022, 2024. Why?
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Again, fertilizers, 18%. And now you got the war that's taking place here. That's impacting them
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as well. So shipping disruptions do not stay in the Gulf. Inputs leads to planting decisions,
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leads to crop yields, leads to grocery shelf prices. And then what happens? Post-Epic Fury,
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US urea import costs jumped 30% in a single week. By the way, last but not least, this chart I'm
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going to show you before we wrap it up. 70% of American farmers today cannot afford all needed
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fertilizer. 70% of all farmers cannot afford the amount of fertilizer they need today. If you want
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to get even more specific of by what product, rice, 88% of them can't afford it. When it comes
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on to cotton 86 peanuts 84 sorghum 80 oats 73 wheat 70 soybean corn fruit barley vegetables 61
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they cannot afford a fertilizer and if you're wondering market-wise what area it is 78 is what
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region us where we are okay southern region 69 is north eastern region 48 is midwest and then you
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have 66 percent that is the western region this issue you may be watching is saying uh why should
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i care about this well if you care about the food that you're eating if you care about if you're not
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going to do the farming because i'm not going to do it myself it's not something i choose to do i
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chose a complete different profession you i you also didn't choose to do it just like somebody
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chose to serve the military and go to you know wherever they are in the world right now 18 months
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away from their own families. It's not a job you and I decided to do. We want people to choose to
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serve the military the same way we want people to choose to wake up every single morning wanting to
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be farmers. And the most important thing they need is what? An incentive and pride that we, you and I
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are grateful for them and we understand the challenges they are facing today. So whenever
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you hear conversations about farmers, wherever you go where you run into farmers, we had an event a
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couple of weeks ago at the Trump Doral. And it was a man, I was telling the story of Paul Harvey
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about God loving farmers. He comes to me afterwards on my house. He's got his old hat on. He's a
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farmer. We sent a bunch of our guys to his place, a guy named Saul Mario and a couple other guys
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went to the farm. A couple of different people are there spending time with them. The stories,
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the pride it takes to do what they do. If you run into a farmer at an airport or anywhere else,
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and they say they're farmers, oh, you know, they're farmers. Take a quick second and say,
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thank you for your service, because without them, you and I and America would be in a lot of trouble
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today. If you got value out of this video, give it a thumbs up, and to the 51% of the community that
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watches our content but hasn't subscribed, click on that button. It means a lot to us, helps us
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up with the algorithms, and if you enjoyed this video, you want to watch another video I did three
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years ago on farmers protesting around the world. Click here to watch it, and then last but not
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least, if you want to get the notes of everything we discussed for free, click on the QR code
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somewhere around here. Go to the PBD Entrepreneur Circle. You can download the notes and then go
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share it with your friends, family, and talk about it as well. Take care, everybody. Bye-bye, bye-bye.