The Quiet Storm: The 3 Phases of the Financial Cycle Threatening Family Farms

There’s a quiet storm building across rural America.

You won’t see it on the news, and you probably won’t hear about it at the local co-op. But if you pay attention, you can feel it.

It’s in the subtle stress when you open your books. It’s in the hesitation before you bid on that next piece of ground. It’s in the voice of every farmer who is quietly wondering: How much longer can we keep doing this?

The truth is, farming isn’t just going through a rough patch. We are in the middle of a financial cycle that is about to test every single family operation in the country.

If you don’t understand the three phases of this cycle, you risk ending up where thousands of others already have: buried in debt, out of cash, and wondering what happened.

Here is the breakdown of the cycle we are walking into—and how to survive it.

Phase 1: The Greed Phase

Every collapse starts in a season of abundance.

When grain prices are high, interest rates are low, and everyone is making money, it feels like the good times will never end. This is the phase where you start hearing the classic CPA advice: “You gotta buy something, or you’ll just pay it in taxes.”

So, we do. We buy new iron. We put up new sheds. We buy that chunk of ground next door. The banker is happy, the accountant says it’s smart, and everyone is convinced they are just “investing back into the operation.”

But here is the quiet truth: Those decisions aren’t always strategic—they’re emotional.

Deep down, the driving force isn’t ROI; it’s FOMO (Fear Of Missing Out). We think, “If I don’t buy it now, I might miss my shot.” Greed blinds us. We stop asking, “Will this pencil out when prices fall?” and start asking, “How much can I afford while times are good?”

It happened in 2012 and 2013. It happened again in 2021 and 2022. And the consequences are about to surface.

Phase 2: The Fear Phase

Eventually, the wind changes. Markets correct. Interest rates climb.

Suddenly, those decisions made during the “good years” start keeping you up at night. That new tractor payment that felt like a reward for hard work now feels like a mistake. That building meant for expansion now looks like a burden.

When you finally sit down with your numbers, you realize something terrifying: You have more iron, more debt, and less margin than ever before.

This is the fear phase. It’s when optimism disappears and reality sets in. For many operations, this is where the slide begins. Instead of facing the numbers head-on, they freeze. They hope things will bounce back. They wait.

And waiting is what kills operations.

Phase 3: The Collision Phase

This is what we are walking into right now in 2024 and 2025.

The Collision Phase is where the market, the tax bill, and the banker all show up at the same time. You have loans to service, equipment to pay for, and income that is half of what it was two years ago.

Farmers in this phase are forced to sell grain early just to make payments. They are borrowing money to pay taxes they deferred during the good years. Suddenly, an operation built over 20 years feels like it is collapsing overnight.

The numbers don’t lie. Margins are shrinking, and interest is climbing. For those who overspent in 2021 and 2022, the bills are coming due.

How the Best Operators Survive

It doesn’t have to end like that.

The best operators—the ones who always seem to come out stronger on the other side—don’t play emotional games.

• When everyone else is chasing shiny objects, they sit still.
• When everyone else is buying, they are stacking cash.
• When everyone else is forced to sell, they are buying assets at half price.

They understand the cycle, and more importantly, they understand their numbers.

Clarity gives you control. You cannot stop the market, and you cannot stop inflation. But you can build a business that is ready for it.

Ready to Master Your Money?

At Legacy Farmer, we work with hundreds of operations across the country, helping them track their finances, plan for downturns, and make business decisions that actually pencil out.

This is the state of farming today: Opportunity hidden inside chaos.

The ones who survive it will be the ones who finally learn how to master their money before it masters them.