Farm Progress

Farmers testify on the growing concerns of higher input costs if commodity prices come down to be addressed in 2023 Farm Bill.

Jacqui Fatka, Policy editor

June 20, 2022

5 Min Read
Arkansas farm bill hearing Stabenow Boozman.jpeg
FARMERS VOICE HEARD: Arkansas witnesses representing cotton, soybeans, conservation, forestry and specialty crops shared their thoughts on the 2023 Farm Bill with Senate Agriculture Committee Ranking Member John Boozman, R-Ark., and Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich. in a hearing in Jonesboro, Ark., on Friday, June 17.Senate Agriculture Committee - Republicans

Arkansas farmers and agricultural leaders had their voices heard at a Senate Agriculture Committee’s second field hearing held in Jonesboro on June 17. Farmers expressed the need for more resources to manage changing dynamics in the years ahead to continue to support production agriculture, as well as the important role of building up rural America with additional resources.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., says together her and ranking member Sen. John Boozman, R-Ark., are working hard to put bipartisanship and civility at the center of everything they do in writing the 2023 Farm Bill.

“As we think about the 2023 Farm Bill, we know it means a strong safety net for farmers and families, incentives for farmers to do conservation in more ways that work for their farms, healthy local and regional food systems that provide markets for what farmers grow, support for research and trade opportunities, and investments in our quality of life in the rural communities so many of us call home,” Stabenow says.

In his opening remarks, Boozman adds, “Everyone in this room recognizes that we’re in an unprecedented time, the pandemic, the war in Europe, historic and widespread inflation and now serious concerns about a recession. It just feels different as we consider the next farm bill. We must ask if the policies and programs currently in place are the policies and programs that we need for the world that we find ourselves in? Are we empowering, encouraging and incentivizing our farmers to be more productive and more efficient to be more resilient?”

Overall, farmers who testified reiterated the importance of crop insurance, adjusting the farm program safety net to higher input costs. Other shared interests include continued funding voluntary conservation programs and doubling the funds for market export promotion programs.

Rice producers struggle

Although not heard in the first field hearing in Michigan, rice and cotton producers shared their stories of challenging times in the current market environment.

Jennifer James, a rice farmer from Newport, Arkansas, and member of the USA Rice Farmers board of directors, shared that nearly two-thirds of rice farms today are losing money amid higher input prices and rice commodity prices that have not increased alongside other commodities. She says the current estimate is that rice acres will fall to 2.2. million acres, a 27% decline in the historical average of 3 million acres. James also underscored the ongoing crisis in the rice industry given the financial situation rice farmers are facing this crop year and mentioned two letters that have been sent to Agriculture Secretary Tom Vilsack requesting assistance.

Boozman asked all the farmers on the outlook for the 2023 crop year, and James said many rice farmers may not be able to get to next year without some support this year. “Recent economic analysis is showing that we are going to have a drop in net farm income of about $880,000 per farm in 2022,” James adds. “It’s a very serious situation and I know that any assistance that might come in 2022 will not make us whole, but it might make us start looking at 2023.”

“We are in a critical situation with a reduction in acres [and] that means less hundredweights to go through our driers, to go through our mills, to put on the shelf to remain viable in the marketplace, to maintain market share in our markets in the world,” James says.

James added that the Price Loss Coverage safety net is no longer adequate for rice producers. “Reference prices do not provide the level of assistance needed for an effective safety net for rice producers. Current PLC reference prices for rice were established based on 2012 costs of production,” James testifies.

American Soybean Association President Brad Doyle of Weiner, Ark., testified on the soy industry’s behalf. He too asked for improvements for the farm safety net, including increasing the soybean reference price for calculating PLC and Average Crop Revenue benchmarks and providing the option to update base acres. He notes 90% of soybean farmers use crop insurance, but as revealed through the China trade war and drop in prices, the price protection in the farm safety wasn’t enough.

“We need more money in the program. We don’t need to trade money around. If there’s an ask, it’s an ask to go back and ask for more support there,” Doyle says of increasing reference prices which may bring with it a higher price tag.

Doyle adds cover crops have been a challenge in states such as Arkansas, counter to how cover crops and no-till are becoming the norm in Midwestern states. He says farmers will continue to look for ways to be part of the climate solution, but asks the legislators to ensure they recognize the differences among regions. James also reiterated the need for more conservation funds as the Environmental Quality Incentives Program as an example is oversubscribed three to one.

Accounting for higher input costs

On behalf of the National Cotton Council, Nathan Reed, farms 8,000 acres of cotton, corn, soybeans and rice. Although cotton prices are higher than in recent years, he shares higher input prices, manufacturing shutdowns due to COVID-19 and supply chain disruptions have resulted in significant increases in production costs for 2022. Most producers are expecting a 25 to 40% increase in input costs in 2022, largely due to higher fertilizer, energy and pesticide costs.

“We worry about commodity price declines while input prices are high,” Reed says, who also just the day prior spent $200,000 on diesel fuel to start irrigation on his family farm. “My concerns are not having any kind of safety net on the input side when prices could still say high.” He says with a looming recession in the cotton industry, demand for cotton may go down.

Reed also asked for more resources and the ag committee to write a farm bill that provides long-term stability for the future. Reed recognizes that besides the challenges with input costs, recent disasters have been more extreme than the essential commodity and crop insurance programs currently provide, and current trade disputes have caused a “disarray” in export markets.

“We ask the committee to work with the leadership in both parties to provide long-term solutions to these challenges,” Reed says.  

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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