New Farm Bill Set to Address Outdated Issues
Farming is cyclical. It is par for the course to have ups and downs. But for the past several years, input costs have gone up considerably across the board while commodity prices have declined, said Delta Research and Extension Center’s (DREC) Steve Martin, Ph.D., who is an ag economist.
“It is kind of like everything else in the U.S. since the pandemic,” says Martin. “There has been inflation of all items. While costs are up significantly, commodity prices are about as low as we’ve seen in about ten years. We have been blessed and had some decent yields that offset some of that. But you can’t offset it all.”
Producers are currently operating on the 2018 farm bill that expired in 2023 and was extended for a year. Martin says there is a lot of hope about getting a new Farm Bill passed before another crop is planted. The old Farm Bill is outdated.
“It was set up for five years because things change,” says Martin. “Now it has been six years, going on seven. Farm Bills are designed to be safety nets and we currently don’t have an adequate safety net. We hope to get a new Farm Bill that is more aligned with current conditions. Hopefully we will have some relief in costs going into 2025 due to lower interest rates and decreased costs for fuel. Also, there could be lower fertilizer costs since those are tied to fuel costs. We need markets to improve and people buying products so prices can improve a little bit.”
The farm economy has an impact on all of Mississippi and especially in the Delta. Ag, which includes row crops, forestry and animal products, is the largest industry in the state. It takes farmers being able to be successful to support ag equipment outlets, the ag banking industry and sales for inputs such as fertilizer and seeds. There are spinoff benefits to other areas of the economy as well including retail, insurance, grocery stores, restaurants and tax revenues.
“It affects us all,” says Martin.
U.S. Sen. Cindy Hyde-Smith (R-Miss) has concerns about the vast difference of opinion between Republicans and Democrats as to how the next Farm Bill should look. “My primary focus right now is to provide swift assistance to producers devastated by sky-high input costs and depressed prices this year, whether that happens through a supplemental appropriations package or as part of an improved version of a Farm Bill extension. I am operating with the intent to make sure that happens,” she says.
Hyde-Smith joined with Arkansas Sen. John Boozman at a recent Senate Appropriations Committee hearing, A Review of Disaster Funding, to ask colleagues to broaden the scope to include market loss assistance for the nation’s agricultural sector. The senators warned that one in five farmers could be pushed out of business due to declining farm income, high production costs and soaring interest rates.
“Many farmers across the country are on the verge of going out of business because a hurricane, wildfire, drought, or other weather-related event wiped out entire crops. And they need help,” says Hyde-Smith. “But there are also many farmers across the country on the verge of going out of business due to sky-high input costs and below break-even commodity prices. And they need help too.”
State Economist J. Corey Miller, Ph.D., who is also director of the University Research Center, agrees producers—particularly of corn and soybeans—have had a difficult year due to a combination of lower commodity prices and high production costs. Although farm income is expected to decline for the second year in a row, he sees signs there may be some relief next year as fuel and energy costs are expected to moderate.
“However, a lot of uncertainty remains following the election as to what policy changes, such as trade, could be coming that will impact the ag sector,” says Miller.
Agricultural challenges aren’t unique to Mississippi as similar issues are affecting many regions across the country, according to Chad E. Crow, CEO of Mississippi Land Bank, an ag lending cooperative serving the northern thirty-two counties in Mississippi, which is part of the Farm Credit system. He agrees that low commodity prices, combined with weather-related issues, are creating significant stress for farmers.
“The need for immediate government assistance and the passing of a new Farm Bill is critical during these trying times,” says Crow. “It is a stressful time for farm families. Farming never turns off. I think it is particularly difficult for young farmers who lack the assets and equity to fall back on, in comparison to more seasoned farmers.”
Crow notes that Hurricane Helene, which devastated Asheville, N.C., brought heavy rainfall to Mississippi, highlighting the unpredictable weather patterns. “How many industries are impacted by both a drought and then by heavy rainfall in the same year?” he asks. “We had areas that were very dry and then they became very wet. Farming today is vastly different. Before, you could stub a toe and still make it. But now, even a small issue can cause significant financial damage. Recovery is tough with the high cost to produce a crop in this day and age.”
The situation is made more difficult by the fact that agriculture is one of the few industries where businesses buy inputs at retail prices and sell products at wholesale, a model that adds to the financial strain on farmers.
Crow stressed the urgency of passing emergency disaster assistance quickly. “If farmers go out of business, the impact on Mississippi’s ruralcommunities would be immense,” he says. “Farming and ag is the lifeblood of this state. While we appreciate Gov. Tate Reeves’ efforts to bring in new industries, I’d still say agriculture remains the driving force. If U.S. producers go out of business, consumers may end up relying on foreign commodity imports, which would increase costs for the end user.”
In response to these challenges, Mississippi Land Bank is working to support local farmers, adjusting loan repayment schedules, rolling over operating debts and preparing for a more difficult loan renewal season.
“We are doing everything we can to help our customers through this period,” says Crow. “Congress must keep in mind that current conditions are especially difficult for our young and beginning producers, many of whom do not have significant equity built up from long-time land ownership. Many of these producers are running out of options as they work to survive another growing season. Even experienced producers who have built equity are facing difficult decisions about how much of their hard-earned equity to risk, when there’s no clear path to profitability on the horizon. We need legislation that ensures our next generation of farmers can weather this storm and continue to contribute to America’s agricultural future.”