Getting a new farm bill through congress this year continues to be held up by political wrangling in the House, and last week, the nonpartisan Congressional Budget Office determined that a proposed House farm bill would increase deficit spending by nearly $33 billion. According to the CBO report, direct spending would increase by $15.4 billion between 2025 and 2029. Between 2024 and 2033, the bill would exceed the farm bill baseline by almost $33 billion.
There are several signs of a weakening farm economy as we move through 2024. For example, although cropland values and rental rates have continued to rise for much of the country, Jon LaPorte, farm business management educator at Michigan State University Extension, believes that low commodity prices will begin to encourage farmers to push back on high land values and rental rates. He points out that “With corn being under $4 at this point, there is a lot of downward pressure and great concern about profitability. ”Also, farm equipment manufacturers are reacting to a potential downturn. For example, Kinze Manufacturing of Williamsburg, Iowa, producers of planting, tillage and harvest equipment, laid off193 of their 815 employee work force last week, and farm equipment manufacturing giant John Deere Company has cut more than 2,000 jobs this year in Iowa and Illinois.
All of the reports about a potential rocky road ahead for ag producers brings me to an observation that I made recently when I traveled to Lancaster County in southeast Pennsylvania. This county is home to the largest Amish population in the U.S. While visiting , I was impressed by the neat farmsteads, large barns and assorted livestock buildings, along with vibrant crop fields that are tilled and harvested using draft animal power. While most farms in this “electricity free zone” are less than 100 acres in size, I was puzzled about how those families could survive on such small scale operations, even with diversified income streams from a variety of crops and livestock enterprises. One of the farms I that I visited had been in the family since the early 1900s. The visit caused me to wonder about how a farm of this size and other similar sized farms in the region can survive and apparently thrive on such a small scale. I believe that there are several factors that make this possible. First they’re multi-generational farms that have been operated by the same family for decades. Since this farm and other similar farms have been passed down from generation to generation, the equity has remained in tack, rather than being diluted by family members removing their share from these farms, which has kept burdensome mortgages from limiting farm operations. Other factors that have apparently kept them in business include not having huge debts related to replacing expensive tractors, tillage and harvest equipment, and they produce their own farm through breeding their working mares and raising their colts to replace their mamas in the future. While the use of animal power limits the amount of land Amish farmers can take on, this probably also works in their favor because their cost of production is much lower then non Amish farmers, who routinely ship some of their equity off to distant equipment manufacturers and dealers. While we shouldn’t romanticize about theses operations, non-Amish farmers and ranchers might apply some of the wisdom that Amish farmers use with their farms .
Will Rogers wrote “A man only learns in two ways, one by reading, and the other by association with smarter people.”
