Welcome to the September 6, 2024 issue of Cotton News, a service provided by Plains Cotton Growers Inc. for the cotton industry in the Texas High Plains and beyond.
Secretary Vilsack Claims Farmers are Fine Financially — Is He Lying or Clueless?
By Kara Bishop
The USDA Economic Research Service released the 2024 Farm Sector Income Forecast report, and I’m starting to think the Secretary of Agriculture is living in an alternate reality.
He issued a response yesterday that left me and others scratching our heads, so I’m going to break it down.
Today’s farm sector income forecast shows that, while the projection shows a decline from the 2022 record high, 2024 is expected to close out a four-year streak of net farm income that’s above the 20-year average…
Oh yea, farm income for 2024 is going to be above the 20-year average — let’s all celebrate. Because the 20-year average is what farmers are concerned about. The 20-year average is going to keep farm operations in business. The 20-year average is going to save America.
NO ONE CARES ABOUT THE 20-YEAR AVERAGE!
Here’s what we know. Inflation is insane. Interest rates are insane. Cost of goods is insane. Cost of production is insane. Commodity prices are insane. It doesn’t matter where our current farm income sits in comparison to any average you come up with, row crop farmers aren’t profitable — much less breaking even.
Even Agri-Pulse sniffed that out, saying:
“But the rosier forecast masks tremendous variation between sectors. Unexpected gains in the livestock and poultry sectors are helping offset huge drops in sales across major row crops, including corn, soybeans, cotton and wheat.”
For the prior four years, net farm income was consistently at or below that historic average, even before the COVID-19 pandemic…
Cue the election year sensationalism. In translation, Vilsack claims farmers were not making money under the Trump Administration. Farmers were suffering under the Trump Administration compared to the Biden Administration. And honestly? No one cares about that either. The smoke and mirrors routine is getting old.
Let’s stick to the matter at hand: profitability for row crop farmers is nonexistent in 2024 and at the current trajectory, not looking good for 2025, either.
Without question, despite a softening of input costs, returns to crop producers remain a challenge as we recover from shocks in the market, such as Russia’s war in Ukraine.
When did input costs “soften?” Once a cost goes up it rarely comes back down. Let me know if you’ve noticed costs of goods and services going down in your business operating budgets. And I have no doubt that the Russia-Ukraine conflict affected the market. However, he’s omitting one of the biggest reasons we have market issues. Our trade deals flat out suck. Our trade deficit is higher than it ever has been, and we’re letting other countries run over us when it comes to agricultural exports.
…farmers will continue to see declining production expenses led by feed, fuel and fertilizer helping to offset lower commodity prices. Farmers’ equity in their farm operations also continues to increase, rising 2.7% since last year.
I think it’s inaccurate to apply data universally to farming. Farm operations are different depending on how you farm, what you farm, where you farm, etc. Applying the equity increases that livestock producers have experienced to all farmers unilaterally is dishonest.
The Biden-Harris Administration continues to fight for a system where family farms work for the family, not the other way around. Our investments in climate-smart conservation, on-farm renewable energy, domestic fertilizer production, expanded local meat processing, organic markets, and procurement from local and smaller-sized operations are contributing to a more resilient, robust and diversified food and farm sector so that all farms can thrive, not just the top earners. In addition to expanding access to crop insurance, which is vital in the face of increasing natural disasters and global disruption to markets, the next Farm Bill must cement this approach to investing in farms of all sizes, and move us away from a dangerous ‘get big or get out’ approach.
This is Vilsack’s story and he is stickin’ to it.
The idea that the big farms, the “top earners” are corporate farms is a myth — 98% of U.S. farms are family owned (ironically the source for this statistic is USDA). The large-scale family farms are responsible for 90% of the production. That doesn’t make them big farmer monsters preying on the small rooftop tomato growers. It means they assume 90% of the risk as well.
Originally when this country was founded, the American dream was to work hard, and pass that work ethic on to your kids. Provide them with a legacy to protect and pass on to their children. That’s why people flocked to America: the freedom to build something that would last. According to Vilsack, the American dream is “dangerous” and needs to be punished with weird calculations, dishonest averaging and a farm bill that penalizes those who have built generations of equity. The circumstances of 2024 are threatening the American dream. The cost of doing business compared to the profitability of said business is killing the American dream. However, it’s the American dream — the 10% of farms providing 90% of this nation’s production — propping this country up amid all the crises she’s currently drowning in.
So, in the end, is Secretary Vilsack clueless? I don’t think he is. I think he knows exactly what he’s doing and it’s time to call a spade a spade. Weaponizing USDA against the very people it was designed to support is shameful. The election year antics are getting ridiculous.
Get your crap together man. Before most of the farms are gone rendering nutrition programs and small farmers pointless. You care about the hungry? Prove it.
PCG Headed Back to the Hill!
By Kara Bishop
We’re headed back to Capitol Hill September 9 to advocate for a 2024 Farm Bill and economic stimulus package. It will be an exciting time as most of the cotton industry will be present in D.C.
Last Friday, the Southwest Council of Agribusiness hosted a Farm Bill Summit where people from across the nation gathered to gain insight on the Farm Bill and state of affairs for the agriculture industry at large.
“The number of people at this event shows just how bad everything is,” one attendee commented.
The data painted a bleak picture of farm country’s future should nothing change, while also highlighting the need for a farm bill and economic assistance.
In this entire event, one key moment stuck out to me. Toward the end, PCG CEO Kody Bessent said, “I’m pumped about this farm bill, and I think you’ll be so proud of the work that’s been done to bring it to fruition. I believe it will be enacted at the end of this calendar year, and we’re also working on economic relief to bridge the gap between now and when the Farm Bill goes into effect.”
I’m used to hearing him say this. He says it often, and I believe him — he should know as he’s been doing the work.
What was interesting was the crowd’s reaction. They didn’t expect a positive position on farm policy amid all the challenges that producers are facing. Even some of his colleagues were actually uncomfortable with what he said. And I have a theory as to why.
Defeat is comfortable.
We don’t put much stock in optimism or hope for that matter. It’s more comfortable to participate in negativity. You don’t get hit as much if you keep hope from rising. You don’t get disappointed if you don’t expect anything. If you keep close to the fire, you’re just going to get burned.
It goes against the grain to act excited about anything right now in the agriculture industry. And, honestly, it takes guts to express that excitement. We tend to enjoy a negative majority and it’s more comfortable to complain than it is to fight in the arena.
People were taken aback by Kody’s comments and questioning whether he could possibly be right given the circumstances farmers are facing today. I would argue they’re asking the wrong question.
Here’s a better one. Which advocate is more effective with Congress: the excited one or the one who expects to lose? Which one is going to keep trying? Which one is going to keep making progress?
The only constant thing in this world is change. The only solution to change is adaptation. Whether it’s an organization or an entire industry, it either adapts or it dies.
Defeatists don’t adapt. They’ve given up. They’re no longer thinking outside the box. They’re no longer looking for solutions, much less advocating for them.
I don’t have rose-colored glasses on, and the men and women who are flying in next week to fight for agriculture don’t, either. We understand it’s bad in farm country. We understand there is real suffering going on. But at the end of the day, if we’re really going to survive as an industry, we must decide whether we’re going to operate as winners or losers.
Which one are you?