3 Reasons Corn Farmers Are Doing Great Despite The Drought : Planet Money Record revenues, rocketing land values and federally subsidized insurance.

3 Reasons Corn Farmers Are Doing Great Despite The Drought

1. They're expecting record revenues

Our colleague Dan Charles writes:

On average, corn growers actually will rake in a record amount of cash from their harvest this year. ...

Why? It's simple. Because of the drought, supply is down and the price of corn has gone sky-high. So even a reduced harvest is worth more. And alongside the farmers who have lost their crop completely, there are others — farmers in Idaho with irrigation, for instance, or farmers in well-watered central Minnesota or Mississippi — who will make out like bandits. Read Dan's full post here.

2. Crop insurance will cover many farmers' losses

What about farmers whose crops are hammered by the drought? Many farmers will get payments from crop insurance — a program that gets $7 billion a year in federal subsidies.

We talked about crop insurance in our latest podcast, and tried to figure out why farmers get federal subsidies to buy insurance, while other businesses have to buy insurance on their own.

3. The value of farmland is going through the roof

The price of Farmland in the upper Midwest rose by 20 percent in the past year alone. Our own Chana Joffe-Walt was recently in a room full of farmers in Illinois, when one farmer told her straight out:

"Everyone in here is a millionaire ... There's ... millions of dollars in this room in equity in farmland."