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.