Not all periods of low prices or low yields are marked by low farm income. Two economic fundamentals are in evidence here. The first concerns simple farm economics. High prices and low yields frequently occur at the same time. Indeed, high prices often result from low yields, especially when crop shortfalls are widespread.
Low yields can pull down the positive effects of high prices.
This simple inverse relationship is sometimes forgotten when only one or the other measure is used to anticipate eventual farmer prosperity. The second lesson highlights the role of government farm subsidies. Steven J. Taff is an associate professor and extension economist in the Department of Applied Economics, University of Minnesota.