A panel of farmers and agricultural economists painted a bleak picture of the current state of the farm economy and called on the House Agriculture Committee Tuesday to strengthen safety net programs in the next farm bill.
Low commodity prices and high input costs are creating tight margins for producers, leading to difficult conversations with bankers about extending credit, Texas farmer Alisha Schwertner told the committee.
For the first time in their tenure overseeing the farm, she and her husband are struggling to repay the previous year's operating line of credit by the due date.
Schwertner, a Texas Farm Bureau member, said she was quoted 58 cents per pound for cotton two weeks ago, five cents less per pound than what her grandfather received 60 years ago. Yet, she said input costs have increased more than 300% and machinery costs have increased nearly 600% in that 60-year span.
“We are constantly looking to diversify our income while considering whether a future in farming is realistic for our family,” she said, adding, “Our farm, and so many others, will not endure these current economic conditions."
The Agriculture Department is projecting that net farm income will increase sharply this year, in large part due to $31 billion in disaster aid and market relief assistance approved by Congress late last year. Net farm income is forecast at $180.1 billion for 2025, when adjusted for inflation.
Production expenses are projected by USDA to decrease by less than 1% to $450.4 billion in 2025, leaving them near the record highs of 2022, John Newton, the executive head of Terrain, told the committee. Costs are projected to increase for seed, chemicals and repairs, while fertilizer and energy prices are expected to decrease, he said.
Excluding government support, U.S. net farm income is projected at $138 billion in 2025, a slight increase from last year when adjusted for inflation. Still, excluding government payments, inflation-adjusted net farm income has fallen by 26%, or $43 billion, since 2022, Newton said.
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Newton said a Terrain analysis anticipates a $339 revenue shortfall, or 38% below breakeven, for cotton in the 2025-2026 marketing year, based on price and yield expectations. Grain sorghum is projected to see a $174 shortfall, or 40% below breakeven, corn is anticipated to see a $161 shortfall, or 19% below breakeven. All major U.S. field crops are expected to see projected revenues in 2025 below the cost of production, he said.
“We’ve seen tight margins now in farm country for three straight years in a row,” Newton said, adding that the economic assistance package passed in December “is not going to make anyone whole.” He said that according to his calculations, around $130 billion in ad hoc support has been provided to farmers in the last six years, compared to around $20 billion through the two main farm bill programs for row crops, Price Loss Coverage and Agriculture Risk Coverage.
“Our farm safety net is broken,” Newton said, calling for additional strengthening of the farm bill programs. "It does not work the way it needs to work and that’s why we’ve had to rely so heavily on ad hoc support.”
Cattle producers, as opposed to crop farmers, have seen income levels rise since 2022 amid declining inventories, Newton said. Still, he said, cattle producers are hesitant to expand due to pasture conditions and replacement animal costs.
Rodney Weinzierl, the executive director of the Illinois Corn Growers Association, cited a University of Illinois analysis indicating that 2025 will be the third year of negative returns for the state’s corn and soybean farmers.
"The magnitude of the downturn is yet to be determined but has the potential to be on par with the 80’s farm financial crisis,” he said in written testimony
Weinzierl warned lawmakers against a voluntary base acre update, which he said could cause farmers to “make the rational economic decision to maintain or switch to the highest value base possible — even if that farmer does not plan to grow the crop in the future.” Instead, he advocated for a mandatory base acre update.
Ryan Talley, a California fruit and vegetable farmer who testified on behalf of the Specialty Crop Farm Bill Alliance, cited rising labor costs, limited access to pesticides and other crop protection tools, foreign market uncertainty and natural disasters as challenges facing the specialty crop sector.
In response to a question from House Ag Committee Chair Glenn Thompson, R-Penn., Talley said rising H-2A wage rates are increasingly challenging specialty growers’ operations. While he said the program possibly saved his farm in 2016, he said costs have since gone up around 30% or 40%.
The program "could possibly spell the demise of our farm due to escalating wages," he said.
Talley also urged lawmakers to expand crop insurance availability for specialty crop growers. He said the SCFBA’s 2025 recommendations include "comprehensive proposals to modernize the whole farm revenue insurance program, provide certainty regarding what the perils revenue insurance policies actually cover, and establish a private sector led advisory committee to supplement the expertise of the Risk Management Agency and provide the specialty crop industry with a formal role and voice in the process.”
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