Last week, Zippy Duvall, president of the American Farm Bureau Federation, testified before the U.S. Senate Special Committee on Aging, warned senators that many farmers may face a mental-health crisis if trade wars aren't resolved by this fall. Sen. Raphael Warnock, D-Ga., and Duvall agreed that many older Georgia farmers are being forced to sell off parts of their land or having to take out second mortgages to stay afloat as a result of natural disasters, rising input costs and trade disruptions that are adding to many farmers woes. Duvall added that AFBF's policy opposes tariffs because agriculture is often the target of retaliation. He stated that “we also know that our farmers must have that level playing field because 20% of our income is from trade, and they have got to have it, so they're willing to wait,” but, Duvall is worried that farmers are becoming overleveraged with their credit while they attempt to survive the current crop year.
Politicians and agricultural organization leaders are expressing concern about the current outlook for agriculture producers for good reasons, and David Kohl, professor emeritus of agricultural and applied economics, Virginia Tech University agrees. He was on the front lines helping farmers recover from the 1980’s farm debt crisis, and he recently reported that farm incomes have dropped to a two-decade low in 2024, with average farmers earning just under $22,000, the lowest farm income in two decades. He points out that agricultural lenders are concerned that 2024 may be just the opening chapter in a longer downturn story, since the economics for refinancing in 2025-2026 is not promising. He continues to meet with ag producers to encourage them to be proactive about their operation’s management rather than to simply wait for favorable market shifts, since agriculture has always faced factors beyond the control of farmers.
While crop producers are looking at some tough sledding this year, the May 16th USDA Beef/Cattle Forecasts paints a brighter picture for cattle producers. Factors include the May 11 import ban on live cattle from or transiting Mexico, and tighter anticipated supplies of feeder cattle, that will reduce U.S. beef production in 2026 by 5 percent. The USDA also forecasts that cattle prices in 2025 will be higher than was projected last month, with 2026 prices projected to reach new highs, due to the expectation that 2026 beef imports will decline by more than 6 percent.
Bloomberg news service and Reuters reported last week that the U.S. Department of Agriculture is undergoing a review of non-statutory reports including a quarterly trade forecast that should have been released on May 29th , but it was delayed and redacted because it pointed to record U.S. farm trade deficits. This quarterly report typically includes trade estimates for several agricultural trade categories. However, when it was finally released on June 2nd, it didn’t include the usual analysis of agricultural trade categories, because Trump administration officials believed that the increased agriculture deficit that was disclosed in the original May 29th edition of the report ran counter to the president’s messaging that his policies were going to reduce U.S. trade imbalances. With all of this obfuscation, many grain traders are now uneasy about the validity of USDA reports that they rely on for pricing of the grains they trade on a daily basis.
Albert Einstein wrote, “Whoever is careless with the truth in small matters cannot be trusted with important matters.
