There is an increasing drum beat in some agricultural articles that are casting today's agricultural downturn as a return of the 1980s agricultural debt crisis or even headed toward a 1929 depression. However, over the past couple of months, surveys of U.S. agricultural producers indicated that while Trump’s trade war was putting pressure on crop prices, they were not too worried because they thought that China and other countries that had been slow to purchase corn and soybeans would soon jump into the market. But now, farm organizations are sounding alarms. On October 2nd, Brownfield news reported that Farm groups from across the country were calling for economic support to help producers dealing with depressed markets.
For example, an American Farm Bureau Federation letter that was sent to both President Trump and Congressional leaders, emphasized the severe economic pressures that American farmers and ranchers are facing. The letter cited falling crop prices, rapidly rising expenses, and unending trade disputes that were creating untenable conditions that we are becoming too much for farm families to bear. The letter also pointed out that “Across the country, farms are disappearing as families close the gates on the farms tended by their parents, grandparents, and generations before them.” Also, Farm Bureau President Zippy Duvall urged both Trump and Congress to authorize bridge payments for farmers before the end of 2025, and to also find long term solutions for farmers that will help to improve long-term solutions, to “help improve economic conditions in rural America, including fair and enforceable trade agreements.”
Kam Quarles, with Specialty Crop Farm Bill Alliance and National Potato Council, stated that the crisis facing family farms is much bigger than lost markets in China. “It’s also about ag labor, and challenges with a very strong dollar. All of these economic challenges and policy challenges are creating a very chaotic environment for family farms, and that’s why you see this broad call from U.S. agriculture.”
To point out the problems, a recent report from Compeer Financial a member-owned, Farm Credit Service company that serves agricultural producers in Illinois, Minnesota and Wisconsin, estimates that production costs this year for corn is $909 per acre or $4.33 per bushel, while the cost for soybeans is estimated to be $ $11.03 per bushel. Current market price for corn is $4.33 per bushel and $10.06 per bushel for soybeans. In case you didn’t catch the irony of those numbers, it indicates that many farmers will get zero return on a 210 bushel per acre corn crop and around $64 per acre on a 60 bushel soybean yield in their fields.
But not all agricultural operations are in trouble. Many small farms and ranches have diversified enterprises that include livestock and crops. This year, cow-calf producers are looking at near record calf prices, and many pork producers are also anticipating a profitable year, because the hog inventory is tight, while both domestic and export demand are strong, with pork exports forecast to reach a record high this year. Hog farmers expecting to see profits, that are forecast to be between $20 and $25 per head.
So now, the Trump administration is floating plans to bailout farmers, but as in the past, any bailout is unlikely to provide much help for small scale farmers, who also deal with tariff driven increased costs for seed, fuel, fertilizer and equipment repairs.
Thomas Jefferson wrote, “Neve spend your money before you have it.”
