It is a breakeven year for U.S. farmers facing the rise in production costs coupled with downward trends in commodity prices. Historically speaking, today’s financial situation is worse than the 1980s. Adding to that are concerns about inflation, national food security, and the desperate need for a farm bill.  

This storm of economic pressure also brews unease about the potential loss of U.S. farms after the current production year. How are farmers expected to stay in business with these tight margins? 

Recently, Rep. Rick Crawford tackled these topics during his address to the board of directors of the Agricultural Council of Arkansas. The meeting was at the Northeast Rice Research and Extension Center in Harrisburg, Ark., on Aug. 15.

Arkansas Representative Rick Crawford said passing a farm bill should not be a partisan issue. It is the time to get the job done for farmers and rural Americans. (Photo by Whitney Haigwood)

Crawford discussed economic conditions impacting the U.S. agricultural production base. He also expressed frustration with political challenges standing in the way of the next farm bill.  

Adding to the conversation were Ag Council board members Jeff Rutledge and Franklin Fogleman. They both farm in Northeast Arkansas and hold positions as board directors within the Farm Credit System. 

Economic pressure impacts rural America 

Farmers and rural communities are feeling the impact of inflation. Crawford stressed the impact and said this same inflation model is seen across our nation’s economy. In the ag sector, it has created an imbalance, funneling more money toward consumption and not enough toward production. 

Related:The new farm bill, or lack of one

“It is the production base that is getting killed” Crawford said. Basically, we have “too many dollars chasing too few goods,” he added. 

Steep input costs coupled with low commodity prices create a grim outlook that could force many farmers out of business. Crawford said, “We are going to lose more farms. The question is, how many? And how bad is this going to be? And do we have enough remaining farms to address our own national security needs from the standpoint of feeding and clothing our own people?” 

Crawford emphasized that the U.S. remains a leader in agricultural production on a global scale, with stable items from row crops to protein. Yet, trade deficits in the balance sheets reflect the U.S. as a net importer of food. Crawford reiterated this should not cause alarm.  

Trade deficits, as he explained, are largely driven by high demand of seasonal produce that consumers expect to purchase any day of the year – with things like bananas, avocados, berries, and tomatoes. 

“What skews our balance sheet are the items we want and like to have all the time,” Crawford said. “We grow some of these crops. But seasonally, the U.S. does not have the ability to make them available 24/7.” 

Related:Push for a new farm bill came with a letter

Collectively, these critical issues reflect our ag economy, and challenges persist in passing the next farm bill. Crawford said, “Winning this argument in Washington is like pushing a boulder uphill.” 

The need for a solution 

The farm bill is a permanent law that originated as part of the New Deal, enacted by the Agricultural Adjustment Act of 1933. It has supported U.S. agriculture for the better part of a century, and congressional legislation has passed 18 farm bills since. 

In that time, the U.S. farm bill has been shaped to include federal assistance programs for conservation, the farm safety net, nutrition, climate change, renewable energy, and forestry.  

Farm bills are usually reauthorized every five years. However, there are instances of farm bill expiration, and American farmers are feeling it now. The 2018 Farm Bill expired in 2023 and was given a temporary extension through 2024. This leaves the ag sector with uncertainty and disruptions as they wait for lawmakers to agree on the next farm bill. 

Crawford expressed frustration due to political challenges that have gotten in the way of passing the farm bill. He also underscored the importance of holding congressional representatives of rural America accountable for their votes.  

Related:Is there new hope for a farm bill?

He said passing the next farm bill should not be a partisan issue. Prioritizing the needs of rural Americans through sound agricultural policy should be a matter of national importance.  

“That is why I advocate for rural America and policies that empower our economy. If Arkansas wins, really the whole country does, because Arkansas is a rural economy,” Crawford said. 

Will we get a farm bill in 2024? As election season approaches, time is not on the industry’s side. At this point, Crawford said, no one is handing out favors before election day.  

Lawmakers will not be back in session until after the election, and the lame-duck season might be our best hope for a farm bill. “Can we do it? It’s possible,” he said. But he also cautioned about being overly optimistic.  

To see progress, congressional delegates must commit to finding solutions for their constituents as opposed to admiring a problem that creates fodder and rhetoric on Capitol Hill. 

“I am tired of admiring problems,” Crawford said. “We need to fix problems, and this is not a problem that needs to stand for admiration purposes. It needs to be one that is addressed and addressed quickly.” 

Worrisome outlook for farmers 

Joining the conversation were Fogleman and Rutledge, both fifth-generation farmers. They were invited to discuss the looming financial crisis from an ag lending and production perspective.  

Fogleman represents a 10-county area as board director for Farm Credit Mid-America. He said while the lending company is not fearful, they recognize the tightening within the ag economy. 

Fogleman reported that Farm Credit Mid-America has a strong portfolio, and the company’s credit quality is as good as possible. He said, “Farm Credit Mid-America has the ability to withstand the challenges we are facing, but we know we are going to have to come together to find different solutions in terms of the farm bill to make it better in the future.” 

From a production perspective, Fogleman said the math is simple. He compared the decline in grain market prices that have resulted in tighter margins and additional financial pressure for farmers this year.  

Then he said to Crawford, “Congressman, we have a concern in farm country. Lenders recognize it. They are talking about it from a credit standpoint of what they can do. It is not just Farm Credit lenders. I visit with a number of regional community bank lenders who are getting together and talking about some of the same concerns.” 

Rutledge represents the Arkansas Delta as board director for AgHeritage Farm Credit Services. He emphasized the financial strain on farmers in his area. 

“We have been very concerned at AgHeritage. And as Franklin said, we’ve built capital and reserves over the several good years to withstand times like these. We will continue to serve our members and serve our purpose and our mission. But there is great concern.” 

Rutledge said last year’s loan renewal season was tough for AgHeritage, and this year will be even tougher. “There is no way anybody can yield their way out of a loss this year. It is just not going to happen.” 

He continued, “Farmers looked for marketing opportunities throughout this year and they did not materialize, and prices continue to get worse. It concerns all of us in lending and in agriculture with the situation we are in.” 

Rutledge also expressed gratitude to Crawford for his work on the farm bill, with hopes it is not too late for fellow farmers to continue production into the next year.  

Crawford heard their pleas and said he is committed to finding solutions for rural Americans. He also acknowledged that today’s historic economic conditions create a financial crisis worse than what farmers experienced in the 1980s.  

“I am not laying down on this deal. I am not giving up. I am not asking you to,” Crawford said. “We have a lot of problems in farm country, but the most pressing is this one.

“Bottom line, we need a farm bill. But, at the end of the day, everyone will not get every single thing they want. We have to accept the good and not allow the perfect to be the enemy of the good.”