News

Ag economic outlook not great as farm bill work resumes

The ag economy continues to face challenging times as the new Congress begins work on the next farm bill.

During a House Ag Committee hearing on Tuesday, ag economist John Newton with Terrain said in the past three years, net farm income has declined by 26 percent and farm margins remain tight or below break-even.

“We’re witnesses to historic volatility in the farm economy,” he says.

Texas farmer Alisha Schwertner said the price of cotton is 5 cents per pound less than it was 60 years ago. However, input costs have continued to increase.

“In that same time, we’ve seen application costs increase by more than 300 percent and machinery costs go up by nearly 600% and there are new costs, like seed and crop insurance.”

Newton told lawmakers while ad-hoc government support continues to help U.S. farmers “these economic assistance payments offset only a portion of a farmer’s negative margins and they’re only a bridge until a new, 5-year farm bill can be authorized by Congress.”

Chairman Glenn “GT” Thompson from Pennsylvania said enacting a new farm bill with a significant safety net is important this year. Ranking Member Angie Craig from Minnesota said a new farm bill is important, but the added uncertainty from the federal government over the past three weeks hasn’t helped farmers.

“Grant dollars to farmers, already appropriated by Congress and already under contract with USDA have been frozen. Trade wars with our largest trading partners and largest export markets have been threatened. Food grown in America is rotting in a warehouse in Texas,” she says. “We all know, just like before, trade wars will inevitably lead to retaliatory tariffs on American farmers. We know cutting off foreign food assistance programs also cuts off a major market and farm income.”

This is the first hearing of the House Agriculture Committee in the new Congress. Watch the hearing.