Farm Economy

The New Ag Economy: Why This Downturn is a Structural Shift, Not Just a Cycle

Mon, 13 Apr 2026 21:22:20 GMT

What You Need to Know:

Structural Evolution: This downturn is a permanent market shift, not just a temporary cycle.
Friend-Shoring: Trade is moving toward geopolitical allies to ensure supply chain resilience.
Aggressive Cost-Cutting: Farmers are doubling generic input use and delaying machinery purchases to protect margins.
Financial Resilience: Better management and working capital make today far more stable than the 1980s.
Premium Protein Demand: GLP-1 medications are driving consumers toward smaller, higher-quality meat portions

As the industry enters the third year of this downturn, farmers and agribusinesses are questioning if a recovery is on the two-year horizon. While cyclical behavior is normal, two economists suggest the structural evolution within crop protection, machinery, technology, livestock and other individual sectors is creating a different kind of staying power for those who survive the recovery.

The Evolution of the Cycle

When characterizing the current economic cycle in agriculture, historical patterns provide a necessary baseline, yet the present landscape is defined by unique pressures. Typical agricultural cycles consist of roughly six years of expansion followed by four years of decline. Currently, the market is navigating a “corrective period,” returning to long-run averages.

The drivers of growth are typically demand shocks — export surges, fuel demand or policy shifts such as the Renewable Fuel Standard. However, Wes Davis, ag economist at Meridian Ag Advisors, notes the current environment is an intersection of traditional contraction and sector-specific evolution.

“What I think we’re experiencing right now is that typical cycle behavior where we see growth in some business firms, and then some contraction and pullback to adjust to the cycle going back to more of the long-run average,” Davis explains. “I think we’re also seeing evolution of individual sectors within the market where there’s adjustments happening because of the industry itself.”

In other words, this isn’t just a cycle — it’s also a structural shift.

Change Fatigue and Modern Volatility

Farmers aren’t strangers to volatility, but global trade disruptions, policy shifts and rising competition, especially from Brazil, are layering uncertainty onto already volatile markets.
Farmers are grappling with “change fatigue,” a byproduct of the high velocity of information and extreme price swings that dwarf the relative stability of the early 2000s.

“When I go talk to any industry group right now, the phrase that I hear is ‘change fatigue’, and I feel that. Every couple minutes, something shifts,” says Trey Malone, Purdue University ag econ professor. “But to be clear, it’s not that the farm economy isn’t used to volatility, it’s just the uncertainty and the volatility now is, like, ‘hold my beer relative’ to the old volatility.”

Malone attributes this to layers of uncertainty created by global trade and policy. The rise of Brazilian production, coinciding with the disruption of U.S.-China trade relations, has created a permanent state of flux. This sentiment is reflected in the Purdue Ag Economy Barometer, which shares a higher correlation with the Small Business Index (.5) than with actual commodity prices. This suggests farmers view themselves primarily as small business owners facing broad economic pressures rather than just price-takers.

“We don’t see very strong correlations even with lagged soybean prices and corn prices,” Malone notes. “The world is more complicated than just looking at what happened in the market yesterday and gauging how farmers feel.”

Global Competitiveness and the Trade Reallocation

A primary concern for U.S. producers is their position as low-cost providers. While the U.S. maintains an infrastructure advantage that lowers the cost of getting products to export ports, Brazil continues to close the gap.

“It’s a fair question farmers ask a lot: Are we actually the ones who are the low-cost producers, and do we still have a place in the global market if Brazil continues to lower the cost of production and transport their grain to export terminals?” Davis asks.

However, Davis points out that global trade hasn’t shut off; it has reallocated. Only three global regions — North America, Latin America and parts of Southeastern Europe/Central Asia — are net exporters. The rest of the world remains net importers.

“While our trade has kind of shifted around ... that shift has really reallocated stuff in different places. Those calories and products end up going somewhere. It’s just a question of where,” he says.

The Shift to “Friend-Shoring” and Resilient Supply Chains

The industry is moving from “just-in-time” (hyper-lean) procurement to “just-in-case” (inventory-heavy) strategies, a lesson reinforced by the pandemic. This shift is accompanied by “friend-shoring,” where the U.S. prioritizes trade with geopolitical allies.

“We’ve gone from offshoring to onshoring to nearshoring to friendshoring,” Malone explains. “We’ve got a paper that’ll be coming out ... where we document friend-shoring in ag and food supply chains. Over the last 10 years, there’s been a shift where we mostly in the U.S. trade with other people who vote like us in the WTO. That’s kind of one way to measure friends.”

This resilience is also visible in crop protection. In 2019, 80% of active ingredients were sourced from China. Today, that is closer to 60%, with manufacturing shifting to India and domestic sites. Davis calls these “geopolitically resilient” supply chains.

The Rise of Generics and Decision Paralysis

The economic downturn is fundamentally changing the business model for input providers. Farmers are aggressively cutting costs, leading to a massive surge in generic usage.

“The latest survey I saw shows about 60% of farmers use generics today. That was about 30% to 40% just 5 years ago,” Davis says. This forces companies to pivot from differentiation to operational volume.

In the machinery sector, high costs and economic uncertainty have led to “decision paralysis.” Farmers are extending the life of their equipment, treating machinery replacement as the most controllable variable in managing annual ROI. Davis notes the U.S. ag equipment cycle is currently 15 to 20 percentage points lower than typical low points, driven by this hesitation. Furthermore, there is significant skepticism toward subscription-based technology models.

“Farmers don’t terribly love this idea, and I think the other interesting thought here is I’m not sure that retailers like selling them either,” Malone adds.

AI: The “Undergraduate Intern”

While artificial intelligence (AI) is a major talking point, its current role in agriculture is more supportive than transformative. Malone views AI as a “highly capable undergraduate intern” — useful for processing information but incapable of replacing the trust and risk management provided by human advisors.

“I don’t think you need to be replacing your agronomist. I think your mediocre agronomist just got OK,” Malone says, noting while LLMs can pass CCA exams, they cannot manage the risk of a wrong decision. “The risk management value proposition of an in-person Claude, or whoever, is probably going to win out because there’s still a risk.”

Currently, the adoption gap is wide: While 75% of agribusiness managers see potential in AI, only 4% have implemented it, according to a Purdue University survey in 2025.

Livestock and the GLP-1 Impact

The livestock sector is facing a unique demand shift driven by weight-loss medications (GLP-1s). This is leading to “premiumization.” As consumers eat smaller portions, they are opting for higher-quality cuts.

“The explosion in demand for protein is just shocking,” Malone says. “What GLP-1s do to that calorie count is they are all shifting toward premium cuts. You don’t care how much it costs because you’re only going to have seven bites of it. But you’re going to have a steak. That premiumization is going to really, really take off in the next 10 years.”

Conversely, the hype surrounding “fake meat” has largely faded, proving to be more of an investor-led phenomenon than a market-driven one.

Financial Stability: Not the 1980s

Despite the downturn, the financial health of the American farmer remains more stable than during the crisis of the 1980s. Currently, 10% to 12% of farmers are in a “tight” financial position , compared to 20% to 30% in the 80s.

“We do have a completely different, more professional ag workforce than we did back then,” Malone says. “The farm policy we have right now does not necessarily match what we need for the future, but all of these things make me think we’re in a much more stable position.”

Farmers have built-in “shock absorbers,” Davis adds, including off-farm income and working capital built up during the expansion years. However, in his research Davis has seen how alternative financing is becoming a major tool for the 50% of farmers who use it — either to manage stress or, for larger operations, to leverage relationships with retailers.

Strategic Reassessment: Winning at the Bottom

The experts agree the “bottom of the cycle” is the time for professionalization and upskilling. Surviving — and thriving — will require sharper management. It is an opportunity to reassess farm transitions and management disciplines, such as financial management, accounting and planning, which become critical in tight margins.

“Farmers are going to have to get smarter and get more creative with how they manage,” Malone says. “This is a good opportunity to take a step back and think about what the strategy needs to be moving forward.”

Davis emphasizes relationships are solidified during these periods: “Farmers are going to remember the folks who were around when they were in the bottom of the cycle, and who were there to support them. The best farmers will continue to get better ... I get excited about what we can look like as we come out of this cycle.”

So Is This Ag Cycle Different?

These experts say yes as every cycle presents its own unique reshaping of future opportunities.

To download the full report on why this ag cycle is different and what it means for your operation, click here .

The Shrinking Slice: Farmers Receive Less Than 6 Cents of Every Food Dollar

Tue, 31 Mar 2026 20:30:43 GMT

For the past two years, USDA has estimated farmers and ranchers received less than 6 cents of every food dollar. In 2023, that was 5.9 cents, and using the latest data from 2024, it’s 5.8 cents.

“Our oldest data point right now is 2007 [USDA updated the data series] and that’s 14.7 cents per dollar, and now we’re down all the way to 11.8 cents per dollar,” says Faith Parum, economist with the American Farm Bureau Federation. “So we’ve really seen that decline year after year. It reflects how much of the value of things in the grocery store or when you go out to eat is going to other parts of the supply chain and not necessarily to farmers and ranchers.”

Livestock vs. Crops: A Widening Gap

The aggregate decline masks a widening gap between sectors. While the overall farmer share is down, livestock and crop producers are seeing divergent trends:

Crop Farmers: Share dropped from 2.9 cents to 2.5 cents (a 2.5% year-over-year decrease).
Livestock Producers: Share increased from 3 cents to 3.3 cents.

“Overall, the farmer share is down. But we have those two markets really at odds,” Parum says. “We’ve seen that tale of two farm economies where our livestock producers maybe have seen a little bit of better days than they had had in the past, while our row crop farmers and our specialty crop farmers are really facing strong headwinds in the market.”

Effect at the Farm Gate

As highlighted by USDA, farm finances are quickly strained when farmers/ranchers are capturing a small percentage of the food dollar and even modest swings in commodity prices and/or input prices take place.

Parum adds, “when we talk about the health of our farms and the health of future generations on the farm, and being economically viable and sustainable and being able to keep their operations open, the trends we’re seeing right now are really hard for those farmers. Our ranchers are seeing a little bit of better days right now with high beef prices, but that’s not going to last forever, and with production expenses continuing to increase, we’re really going to see that that question come up of, what is sustainable if, if these dollars we’re spending in the grocery store aren’t making it back to our farmers.”

Where Does the Money Get Distributed?

The key takeaway: farmers produce the raw commodities that make food production, however, the price is clearly more determined by what happens after the products first leave the farm.

The USDA Food Dollar Series tracks how each dollar is spent by consumers and then divides it across the industries contributing to the value in the supply chain, such as farming, food processing, transportation, packaging, wholesaling, retail and food service. As noted by the USDA, with each step in the process, the additional services, labor, transportation and infrastructure add value and increase costs to the final food product.

USDA’s Economic Research Service Food Dollar Series shows in 2024, farmers received 11.8 cents of every dollar spent on domestically produced food, the remaining 88.2 cents of the food dollar went toward the ‘marketing bill’, which includes costs associated with food processing, transportation, packaging, wholesaling, retailing and food service. Over time, this shift illustrates how an increasing share of food spending is driven by services and supply chain activities rather than farm production itself.

Groceries Leave the Most on The Table For Farmers

Farmers’ share of consumer food spending varies widely depending on the type of food purchased. For example, the farm share of the food-at-home dollar was 18.5 cents in 2024, up slightly from 18.4 cents in 2023. But even in this category it means only than one-fifth of what consumers spend on groceries goes back to farmers.

As you may expect, products with minimal processing, require less of the value to be retained in that part of the food system, and therefore return a larger share of the food dollar to producers.

“The highest commodity that gets the most of that food dollar is fresh eggs,” Parum notes. “That’s just because there’s limited labor to process that food.”

Examples include:

Fresh Eggs: 69.1 cents (+6% from 2023)
Beef: 52.2 cents (+4.8%)
Fresh Milk: 50.8 cents (+5.6%)
Pork: 23.7 cents (+7.2%)
Poultry (+3.1%)
Fish (+2.8%)
Tree nuts and peanuts (-1.7%)
Fresh fruits and vegetables (unchanged)
Bakery Products: 4.8 cents (-9.4%)
Soft Drinks/Bottled Water: 1.3 cents (-7.1%)

Are Fresh Produce Growers Price Takers in a Consolidated Retail Market?

Tue, 17 Mar 2026 21:48:40 GMT

Editor’s Note: This story is part of a series that explores the shifting economic landscape of the specialty crop industry.

Marc Arnusch, a third-generation seed wheat, barley, craft grains, silage corn, alfalfa and former onion grower in Prospect Valley, Colo., says this notion of growers being “price-takers” is nothing new. In fact, this notion has been repeated for more than 30 years, starting when he was in college and even when he graduated in the mid-1990s.

“I heard that we’re just price-takers, we’re not price-makers, and that always stuck with me, whether it was the commodities that I grew or the specialty side,” he says.

The Squeeze in Michigan as Margins Tighten

Nick Oomen is also a fourth-generation specialty crop grower with West MI Produce in Hart, Mich. His family’s business grows organic cabbage, zucchini, yellow squash and bell peppers, as well as conventional asparagus, butternut and acorn squash, broccoli, green beans, carrots, potatoes and jack-o’-lantern pumpkins.

For Oomen, the math simply no longer adds up for labor-intensive crops like asparagus facing steep pricing pressure from imports. (Production costs and labor costs will be examined in detail in future articles.)

“In the last five years, our gross sales costs, or what we sell it for, have been probably within 5%,” he says. “It’ll go up and up and down, but it never really moves. I can’t go to a single retailer and say, ‘I’ve seen input costs go up by 20%, labor’s gone up by 15% and my overhead has gone up by 25% in the last four years, and I need a pay increase.’ They just come back with you with, ‘You have to match that price.’”

Oomen says, as a result of these increased costs, his family has opted not to buy new asparagus seed and plant new fields and has instead maintained fields in production. He says they have tried to maximize efficiencies in harvest and packing, but there’s only so much they can do.

“Sooner or later you stop picking the low-hanging fruit, and there’s not much left on this tree,” he says. “You’re trying to squash pennies out to make a difference, and you’re losing dollars. It’s at a certain point [where] you just have to hang it up and say, ‘This is a lost cause. This crop’s no longer going to be profitable.’”

That’s the position Chris Pawelski and his family found themselves in. Pawelski, a fourth-generation onion farmer from Goshen, N.Y., eventually left specialty crop growing due to the challenges of selling his family’s onion crop.

He says he never had a way to verify the price he would get was fair or real; if the price came lower than production costs, he would have to eat it.

“The packer would say, ‘I’m getting them from your [neighbor] for $13 or $12 [per 50-pound bag],’ and there’s no verification; you have to take their word for it,” he says.

Pawelski often faced pressure from imports from Canada or other parts of the country that the packer would use as leverage to keep prices down.

“I had onions sitting in my barn that I could not sell, and they were good onions,” he says. “I would go to the local grocery store 5 miles away, and it was just loaded with Canadian onions, and I had onions sitting in my barn that I could not sell.”

Pawelski says he sold the onions he grew to a local packer-shipper, though he would often have to beg the packer-shipper to take his crop.

“I could not tell you, even to this day, what the process is as far as like when the onions leave my dock,” he says. “I know they go to a local repacker, but the actual full process of what and who the other buyers are like where they are located, I couldn’t tell you.”

Pawelski says while some buyers tried to help keep prices up, generally, the prices were about the same as they were 40 years ago.

“I’m getting paid the same price for my onions dollar for dollar that I got in the 1980s,” he says. “I was paid $6.50 a bag, and I’m paid $6.50 a bag now.”

High Production Costs Reshape the Agricultural Landscape

Jordon Walsworth, a fourth-generation asparagus grower for Golden Stock Farms in Mears, Mich., says growers often face higher production costs, whether that be labor, inputs or more, but they can’t necessarily pass those inflated costs on to the retailer.

“The farmer grows the product, and the downstream packer, input providers, chemical providers, salespeople, they all don’t have a job without that product, and all of their costs have inflationary increases,” he says. “We have the pleasure of paying all of those inflationary increases before we end up with what’s left.”

While costs have gone up, Walsworth notes, commodity prices have either gone down or remained flat.

“What that’s done to the landscape of agriculture is that these specialty crop guys are getting bigger, but the smaller guys are getting pushed out because they can’t afford it on those margins,” he says. “Growing up around here in Mears, everybody had 10 acres of asparagus. Kids after school ... would go pick it. Everything was great. Those farms don’t exist anymore. Now you have to have guys that can capitalize on little economies of scale and stack together the pennies that are left to make a go of it.”

Though his family’s farm is about six years away from a Centennial Farm designation, aside from a genuine love of farming, what’s weighing on him is the potential loss of domestic production. (Import pressure will also be examined in detail in a future article.)

“Where will our food come from if we’re not growing it?” he says.

Jon DeVaney, president of the Washington State Tree Fruit Association, says another challenge that he’s faced in conversations with legislators is that any government policy change that adds cost to a grower’s production can’t get passed on to the consumer.

“[Legislators] just assume that if they impose a new cost on everyone, it will get socialized, and it just gets baked into the price of goods,” he says.

Over the last two years, DeVaney says retail fruit prices have climbed while wholesale returns for growers and packers moved in the opposite direction.

“Consumers see retail prices increasing and the assumption is that, well, growers are getting some part of that,” he says. “The policymakers and a lot of the public’s assumption is that the growers get a share of the price. Price at retail remains relatively constant, and it’s not necessarily the case that retailers may be using a higher margin on particular products to absorb their overall cost of doing business and potential losses or non-increases in margins on other products. And while that might make sense for their enterprisewide management, it really puts growers in an untenable position to have their own production costs increasing even as their wholesale pricing is flat or declining.”

Starting With the End in Mind

Arnusch says he thought about the notion of growers as price-takers as he entered the fresh produce industry and eventually took over a packing shed. He says he was at one point the third- or fourth-largest onion packing shed in Colorado.

“We started with the end in mind,” he says. “We started with the market, and we worked backward. Let’s start off with these consumer packs. Let’s try to hit that, that high margin, that high revenue, maybe lesser volume, but that high-revenue product.”

Arnusch says he looked to 2- and 3-pound bags and onion sacks to hit that higher-revenue item, and then that informed the types of varieties he planted and the management.

“We weren’t looking to produce the most onions in the state of Colorado. We were looking to produce the highest-return onion per acre, and that’s not just a metric of yield, that’s not just a metric of cost, but it was the metric of market value,” he says. “We did a lot of specialty labeling. We did a lot of things in that space that differentiated in the marketplace, where maybe a lot of the big packers didn’t want to play. That was our sweet spot, and because we were smaller, because we were more individualized, we could do so many more things in the field that rewarded us in the marketplace.”

Shrinking Share of the Consumer Dollar and Consolidation

Washington State University professor and economist Karina Gallardo points to a stark USDA metric: For every dollar a consumer spends at the grocery store, the farmer sees only 14 to 15 cents.

“The rest of the 85 cents goes to the supply chain, whoever is between the grower and the end consumer,” she says.

Packinghouses sit in the middle of that gap. Growers face receiving fees and per-box processing charges, while the packinghouse — and not the grower — negotiates the final fob price with the retailer.

Gallardo works with growers to maximize efficiencies, often fighting the “pick everything” mentality. While clearing a tree quickly cuts harvest labor, it often backfires at the packinghouse.

While a faster pick will cut harvest costs, picking everything will also increase packing charges through receiving fees. She says a grower that reduces the number of defects going into packing by about 15% to 20% will likely see a beneficial outcome.

“It is a very fine trade-off,” she says. “The packinghouse charges $100 to $130 per bin they receive. It is to the advantage of the grower to send only the best apples possible.”

Chris Jones, executive director of the Main Street Competition Coalition, an alliance of independent business owners, trade associations and agricultural groups, says this notion of growers being price-takers is true when there is a lack of competition among retailers. That consolidation has a significant impact on the overall market share; in fact, a study in 2021 showed the top four grocers sold 69% of the country’s food.

Consolidation creates more leverage for retailers over suppliers, but Jones says part of the reason the fresh produce industry finds itself in this situation is the lack of enforcement of antitrust laws. A healthy competitive retail marketplace benefits both growers and consumers.

“For producers, generally, you want a robust, robustly competitive retail marketplace to sell into. And likewise, for consumers, consumers want to have choices,” he says. “When you have a market like that, you create space for smaller-scale packers and produce growers, and you also address the problem of retailers being too consolidated in one area and dictating terms to produce growers and packers.”

Jones says that unfortunately has allowed for continual consolidation in the last 40 years in which those retailers have more power over producers and food product suppliers. He says this consolidation of retail forces a consolidation of packers to meet the scale of this new marketplace.

“It’s created this cascading effect of consolidation that’s problematic if smaller producers want to be viable in this retail economy,” he says. “What we believe is needed is a fair marketplace that is policed by our antitrust laws, and right now, the marketplace is being inadequately policed by the antitrust laws, and that is ... in large part responsible for this problem we have in the economy.”

Breaking the Commodity Cycle and Winning the Fresh Aisle

What can growers do? For one, Arnusch sees an opportunity with value-added.

“You’re de-commoditizing a commodity,” he says. “Even though a specialty crop can sometimes be a commodity, you can add value to that crop by differentiation. You can add a little bit more margin ability into it because it is so specialized.”

Arnusch points to how his company packed two yellow, two white and two red onions in a sleeve that was a unique pack and offering.

“What drew me to that space originally was the opportunity to be economically viable,” he says. “I could differentiate myself in the market. If I’m a corn grower or I grow wheat, I really can’t differentiate myself in that space; maybe by location, maybe by growing a particular variety, but I’m very much still producing a commodity, and when you do that, you’re subject to the market. With a specialty crop, a lot of times you can set the market or participate in that up value.”

Growers can also deploy effective storytelling to help set the business apart from competitors.

“Most consumers, they really don’t care who’s growing their flour,” he says. “They buy corn oil at the store, and they really don’t think twice about the farmer who was behind it. But they pick up that onion, they grab that bag of potatoes, they grab that apple off the shelf and there’s a story behind that.”

Arnusch says that in a time when the disconnect between consumer and grower is at an all-time high, storytelling will be paramount.

“Especially in Colorado, where agriculture feels like it’s on the defensive, I think that’s going to become more and more important all the time, to get the story out in front of the consumer rather than playing defense,” he says. “I think a specialty crop does that for us.”

Dawn Thilmany, an agricultural economist and professor at Colorado State University, agrees, noting that specialty crops have to some extent leveraged branding to stave off the price-taking notion. Thilmany points to about 10 to 20 different fresh produce brands that consumers can likely name, which hasn’t happened in the past.

Along with branding, there are new cultivars that offer unique eating experiences. She points to Cotton Candy grapes and new apple varieties.

“Just even look at the tomato section,” she says. “Now, between all of the different variants of grape tomatoes, cherry tomatoes, multicolored tomatoes, there’s brand names that weren’t there 10 years ago. So, that’s a signal to economists that they actively have chances to not be price-takers.”

Thilmany says that while retail consolidation may continue, bigger isn’t always better, and the produce industry can look to independent grocers to an advantage.

“Some of those midsize brands can survive by just being in the independent grocers and don’t need to have access to the Big Five, because the Big Five are really the ones who are saying ‘You shall be price-takers. This is what we’re giving you,’” she says. “And if you can stay at the size that the volume you need to move can be workable through what is still left of an independent slice of the food supply chains, you’re going to be in a much better position.”

Innovation serves as a final defense, Thilmany says. Because specialty crop growers are naturally entrepreneurial, growers are more nimble than those in broader commodities.

“With all the changing conditions and stuff, they pivot better, because it’s not as big of a shock to them,” she says.

Why Specialty Crop Economics Has Become an Endurance Game

Mon, 02 Feb 2026 08:36:04 GMT

Editor’s Note: This is the first story in a series that will explore the shifting economic landscape of the specialty crop industry.

Washington State Tree Fruit Association President Jon DeVaney was recently in Olympia, Wash., for Tree Fruit Day, which is a time for growers to discuss the issues impacting the industry with state officials. While those in attendance discussed the dire situation growers find themselves in, he says, a major challenge to having these conversations with elected officials has been how the economics of modern specialty crop farming have taken a turn for the worse.

“Some elected officials think you’re like those carpet stores in big cities that have been going out of business for 30 years, but they’re still there,” DeVaney says. “There is a little bit of that boy who cried wolf danger, from the perspective of talking to some of those folks.”

But much of the conversation stems from the data from the most recent census of ag in which the state of Washington lost more than 3,700 farms from 2017 to 2022, he says.

“Part of it is making sure that they have the stats to see that, yes indeed, this is a particularly rough time throughout the ag economy, especially for specialty crops, and that we’re losing farms,” DeVaney says. “A lot of my growers say, ‘Well, it certainly hasn’t gotten better since 2022, and it has gotten a lot worse.’ So, the aggregate statistics may not be updated, but we know that that trend line, unfortunately, is still continuing.”

Federal Funding Gap

And the sentiment DeVaney shared from his growers seems to be a pulse running through the specialty crop industry. The American Farm Bureau Federation’s figures show $3.6 billion in economic losses for almonds, $1.4 billion for apples, $763 million for lettuce and $717 million for potatoes in 2025. Many specialty crop leaders have pushed for economic support from the federal government .

The Specialty Crops Farm Bill Alliance says specialty crops contribute more than $75 billion annually in U.S. agricultural cash receipts and make up more than one-third of all U.S. crop sales. Yet, under the current USDA Farmer Bridge Assistance program, only $1 billion has been reserved for specialty crops and other commodities while $11 billion has been set aside for row crops.

So, where does that leave the economics of specialty crop farming in 2026? David Magaña, Rabobank senior analyst for horticulture, says a common theme might be unpredictability.

“There have been a lot of moving pieces, but overall, if we want just to characterize the current economic outlook for specialty crops, for growers in ‘26 the climate remains challenging, and tight margins continue to be one of the biggest challenges as the costs remain high, while demand is holding steady,” he says.

Labor and Price Squeeze

And for those in the specialty crop industry, it will likely come as no surprise that labor is the highest cost in specialty crops “by a country mile,” says Michael Swanson, Wells Fargo Agri-Food Institute chief agricultural economist. Swanson says this labor cost extends far beyond the field but even to the cashier at the supermarket.

“The producer can’t change the economy’s wage inflation, but they can work to get the best labor force for their spending,” he says. “This will make the human resource manager a key player in 2026.”

Magaña says crop performance also plays a hand in the economic picture of 2026 with tree nuts, including almonds, pistachios and walnuts, performing better thanks to a better balance with supply and demand. He says this is likely due to the crops’ less labor-intensive production.

While tree nuts faced some challenging seasons from 2021 to 2023, they began to improve in 2024 and 2025.

“Prices for almonds, for example, should be profitable for most growers depending on the cost structure that they have,” he says. “The vegetables and the fruits that are more labor-intensive are facing more cost pressure compared to others.”

Magaña says what’s interesting is that growers often get excited about lower yields because it could mean more returns. But, he says, revenue equals price and quality. With the current walnut crop, it doesn’t always translate to higher prices, which further compresses margins.

The Consumer Paradox

“When we take a look at all this revenue compared to the cost, you need to be looking also, obviously, [at] how inflation is moving, both on your cost side and on your final price side. … To the point of the consumer, we’re seeing inflation has been stabilizing with the Consumer Price Index, but that doesn’t mean that prices are declining. They’re just increasing at a lower rate,” Magaña explains.

He says fresh produce prices have stabilized when compared to other food categories, which is a good thing for consumers but perhaps not so much for growers.

“The fresh produce aisle has become a healthy alternative, and also from a budget perspective,” he says. “So, that’s good news for the consumer, but for the grower, just stabilizing or flat prices and increasing costs, that’s just more pressure on markets.”

Swanson says that while retailers look to price, it’s also important to secure consistency and reliability in fresh produce contracts.

“It does not do them any good to get a good price on nonexistent or below-average quality product,” he says. “A buyer will always prioritize a supplier who does not let them down.”

Swanson says also of note in 2026 will be the impact of GLP-1 drugs on consumers’ buying habits.

“At the moment, they are trying to add protein to their diet to make up for the lower number of calories they are consuming,” Swanson says. “This pressures the fruits and vegetable categories as they make these trade-offs.”

Global Competition and Currency

Swanson says imports will be another economic challenge in 2026, with imports continuing to put a ceiling on domestic prices for specialty crop commodities that go head-to-head against them.

“U.S. producers certainly know that they have to match or beat import prices,” he says. “That is a tall order with higher land costs, labor costs and stricter environmental regulations, but the U.S. producer also has better local logistics, financing and productivity to compete in this market.”

Magaña, though, says that as the dollar weakens, it helps U.S. growers in the export market. He says the dollar depreciated almost 10% in 2025.

“That has improved the competitiveness of U.S. exports in international markets, and at the same time, when you look at that, that serves in practice in the same way as a tariff does for imports,” he says. “All exporters of fresh produce from Latin America, exporting to the U.S., when the dollar is weakening, they lose competitiveness.”

On the market, Magaña says the weakening dollar has had beneficial impacts. Western Europe has begun to import more California almonds and walnuts, which has also helped improve prices.

Wholesale Disconnect

DeVaney says a lot of his conversations in the Washington statehouse stemmed from prices, showing the upward trend line of retail pricing and the downward trend of wholesale fruit prices. He says it was difficult for those officials to understand.

“We had to explain to them that, yes, you’re hearing consumers say that prices are too high, but we’re not seeing any of that,” he says. “And quite the opposite, our growers are seeing less income and are trying to figure out how to survive in that environment. ... We don’t really have the ability to affect directly what we get from retailers.”

Tree fruit growers also raised the issue that they put up-front costs and investments into a crop for which they might not get paid until eight to 14 months later.

“It’s still the growers’ fruit as it goes into storage, and it’s only when it comes out of long-term storage and is packed and sold that they eventually get the net proceeds,” DeVaney says. “And so, that’s the other decision-making challenge, because the grower doesn’t know what the price will be at the time they’re selling it.”

For many tree fruit growers, certain expenses — such as labor costs — are determined by government policy. When asked to identify the most burdensome piece of legislation, policy or economic factor, DeVaney says it’s hard to do. He likens the current state of economics and policy to being attacked by a swarm of bees.

“There’s so many things coming at you that it’s overwhelming, and potentially fatal,” he says. “But you say, ‘Which bee is the worst in that environment?’ Well, they’re all bad, and they’re all coming at me at once. So, it’s the swarm. It’s not the individual bee.”

Capital Strategy and Survival

In terms of inputs, Swanson says this year growers will look to competitive bids on inputs and technology due to the added constraints.

“The entire crop production sector is asking for value with their compressed margins,” he says. “The old saying ‘you don’t get if you don’t ask’ will ring especially true in 2026.”

Magaña also says growers will likely delay investments and upgrades with a challenging financial picture. This includes orchard development, irrigation upgrades or even automation or mechanization. However, the potential for lower interest rates this year before an expected climb in 2027 and 2028 might mean it’s a good time for growers to secure financing and lock in rates.

The biggest risk in a high-volatility market is illiquidity, Swanson says. The key will be for growers to control growth or financing to avoid being asset-rich but cash-poor.

“Debt is not the problem, but the dosage is the problem,” he says. “The old saying ‘the dosage makes the poison’ is true for debt as well. Oftentimes, illiquidity and impatience are two sides of the same coin. Companies should be growing, but making sure it’s a controlled growth is the key.”

Endurance Game

DeVaney says another challenge facing growers is the notion of an appropriate supply, which fluctuates based on current market conditions.

“We do not calibrate supply and demand that finally, especially in fresh produce,” he says. “Because if there’s an abundance of table grapes one year, then that sort of puts downward pressure on all the competing fresh fruits that people might grab for lunch. It’s not just our own crops, it’s the aggregated produce sector, in a lot of ways.”

DeVaney says it’s not so easy to simply make a quick reduction in production for permanent crops, especially if growers are unsure that what they’re seeing is a short-term blip or a larger trend.

“Once you’ve already made that investment, the bias is toward sticking with it until you’re absolutely certain it’s not a good long-term prospect,” he says. “And some of those decisions have been drawn out as well, because the grower doesn’t want to walk away from that investment. And if they have revenue insurance, they have sort of a cushion to keep them hanging on longer to decide: Is that the decision they have to make or not?”

When asked to give a snapshot of his growers’ outlook, DeVaney says there’s a lot of frustration, as growers want to be the masters of their own fate. While agriculture has always had inherent risks, it seems even riskier now.

“It doesn’t feel like there’s a single action they can take to determine the outcome with this variety of global market forces and public policy issues at the state and federal level that are influencing their costs and their returns, and so their profitability feels outside of their control — that when they make good farming decisions that affects their potential, but it doesn’t determine their success or not, which is a frustrating place to be,” he says.

While growers might see choices that need to be made to recalibrate with current market and demands, it’s difficult for growers to be the first or second one to make that decision. It’s easy for the industry to say production needs to decrease, but it’s in the execution that becomes more of a challenge.

“It’s like people in a lifeboat together, with a limited amount of food, who want to jump overboard and not save the others,” he says. “That’s a terrible request to make of anyone, and so everyone is dealing with the starvation rations, looking at each other: ‘Will I outlast you and be able to then survive going forward?’ It feels like an endurance game with your industry peers to see who will come out the other side. And that’s a terrible place to be. People know maybe what needs to happen, but it can’t be decided on. And so, you just buckle down and see if you can survive through the point at which the market forces that correction upon us.”

Swanson says since labor will be the No. 1 cost driver, it will also need to be the specialty crop industry’s No. 1 focus.

“Employers cannot hire at below-average wages without getting below-average productivity,” he says. “However, they can hire at average wage rates and get above-average labor productivity.”

Swanson says there will be opportunities for specialty crop growers to share growth and cost control.

“Converting new customers allows them to outgrow conventional crop performance,” he says. “Their challenge is seeking a higher price to match their premium product offerings. If consumers are looking to save money on food spending, it will be harder to convince them to switch to the premium category.”

Swanson also says overproduction pressuring down prices is the biggest risk to crop profitability in 2026, which could come in the form of aggressive plantings or excellent weather.

“Let’s hope that producers stay in their lane plantingwise and the weather is average,” he says. “The flip side is underplanting or a weather event reducing supply. Let’s not hope for that either. It’s not bad when someone else gets hit by bad weather, but it might be you.”

Less Ag Water Means Fewer Jobs, Deeper Poverty, More Sickness

Thu, 18 Dec 2025 22:03:19 GMT

Everyone in ag knows how interconnected every element of the ecosystem — literal and figurative — is to the wider community. But a recent report quantified just how widely the ripple effects of water restrictions in one irrigation district can reach.

On Dec. 17, the Westlands Water District released the fourth installment of its Economic Impact Report , which examined economic data from 2022 (most recent complete). While the report found the agricultural production enabled by water from WWD directly supports thousands of jobs and billions in economic activity in the area — 20,456 jobs and $2.41 billion, respectively — plus more indirectly, it also highlighted the negative impacts of water restrictions.

“Decreased water availability reduces the number of jobs and level of economic activity within Westlands Water District,” declared the report’s executive summary.

These reductions amounted to about 7,500 fewer ag jobs in WWD’s region, which includes two of the poorest counties in the state, and a decrease of almost $25 million in local government revenues in 2022 compared to 2019.

Direct economic findings

The new impact report uses data from 2022, and updates the 2022 report, which used data from 2019. A key difference between those two data years was that 2019 was a year where WWD received 75% of its surface water allocation and 2022 was a year where WWD got no surface water allocation.

The 2019 report found that WWD “is directly and indirectly responsible for some $4.7 billion dollars of economic activity and nearly 35,000 jobs across the economy.” By comparison, that number for 2022 was $3.55 billion and about 28,000 jobs respectively.

“When that water disappeared, obviously it had significant impacts on the economy,” said Michael Shires, former professor and vice dean at the Pepperdine School of Public Policy and co-author of the report, in a preview event on Dec. 16. “Westland still has a tremendous economic impact. I mean, you can’t ignore $3.6 billion and 28,000 jobs, especially in this region.”

The report credited the lack of water allocations, plus the impact of California’s Sustainable Groundwater Management Act on groundwater growers can pump, for more fallowed acres in 2022 (227,563) versus 2019 (158,103) in the area served by WWD.

And more fallowed land means less production.

“Nationally, farms in Westlands provide 3.3% of the national production of fresh fruit and nuts and 2.8% of the national production of vegetables and melons,” the report notes. It added that the 2.8% share of vegetable and melon production is down from 5.4% in 2015.

“These are the fresh produce that we need, that we want to have in our system if we’re going to have a healthy economy,” Shires said.

More indirect, wider-reaching impacts

Reduced production also has other health impacts, according to the report. It means fewer jobs and less economic activity. Shires highlighted how this connects to poverty in the area.

“The reduction in availability of surface water has led to significant economic impacts, both in terms of economic production and overall activity, but more importantly, in the lives of the people that economic activity reflects,” he said. “These tend to be the poorest in some ways in our communities, but once they lose their jobs, they join the group of poverty.”

He noted that the 20,456 jobs directly supported by WWD represent about 42% of total farm employment in the region, and that Fresno County has roughly 50% higher rates of poverty than the state rate average.

“So, [water reductions] affect these vulnerable populations the most,” he said. “It also affects local tax revenues that you need to support those populations as they grow.”

Disease and pilot endangerment

The report also found potentially unexpected negative impacts associated with water restrictions and more fallowed land; increased disease and pilot endangerment through increased bird strikes.

During the preview event, Shires pointed out the association between the incidence of Valley Fever — a fungal infection of the lungs resulting in flu-like symptoms that is also called San Joaquin Valley fever — and the volume of fallowed acres in the area.

“When land lies fallow and dust blows, there are spores in the dust that infect people’s lungs and create health complications,” he said. “That is a phenomenon that is exploding across the state in the last 10 years especially.”

Another, more indirect health concern is in play as well, according to the report: Threats to pilots at area airports.

The path from water cuts to pilot endangerment has a few steps to it. Reductions in water availability for growers can result in both more fallowed land and more abandoned orchards. Both fallowed fields and abandoned orchards can host massive rodent populations .

“Then the owls and the hawks come and eat them. The raptors obviously then concentrate in those areas and you end up with a higher incidence of bird strikes,” Shires explained. This can be costly because a bird strike can damage or even destroy planes, including the very valuable military jets at the nearby Naval Air Station Lemoore, and risk the lives of pilots.

“Surface water has direct implications to the safety of those pilots and everybody that’s there,” Shires summarized.

Allison Febbo, general manager of WWD, echoed this perspective in the group’s announcement of the report.

“Thousands of families, small businesses and essential public services depend on the economic activity generated by agriculture in our district,” Febbo said. “This report reaffirms how central reliable water supplies are to keeping our communities strong and healthy.”

Will Congressional Inaction Force Farmers to Choose Between Health Insurance and Their Farm Budget?

Tue, 16 Dec 2025 15:16:09 GMT

Healthcare insurance plans for some U.S. farmers could double in 2026, as enhanced federal subsidies under the Affordable Care Act (ACA) are scheduled to expire.

The impending cost surge could affect thousands of U.S. farmers who currently rely on the ACA marketplace for their health insurance, according to the non-partisan KFF (formerly Kaiser Family Foundation), a health policy organization.

KFF estimated in 2023 that 27% of “farmers, ranchers, and other agriculture managers” relied on individual ACA market coverage. Nationally, more than 22 million Americans rely on the ACA marketplace for insurance options.

Farmers ‘Don’t Have Many Options’
Iowa farmer Aaron Lehman, who testified before Congress last week, highlighted the severity of the potential cost increase on his family. He said he expects to pay double to purchase an insurance plan for 2026 that would be comparable to what his family had this year.

“That is an incredible cost for our family budget and for our farm budget,” Lehman stated. The fifth-generation farmer and president of the Iowa Farmers Union described how rising healthcare costs are colliding with already harsh economic realities in agriculture.

“Farmers right now are trying to make all sorts of decisions because commodity prices are low, because of the chaotic trade situation that we’re in and higher input prices. All these things have made a real crisis for a lot of our farmers,” said Lehman.

“Finding ways to deal with that, we just don’t have too many options. Farmers will buy less equipment or not make the necessary upgrades and equipment that they need to,” he added. “They’ll look at their input suppliers, and they’ll decide, ‘what can we do to get through just this year … to get a plan to put the crop in the ground?’”

Read the testimony of Aaron Lehman here. A portion of his testimony and discussion is also featured on a posting to YouTube .

Signup Deadlines For Coverage
The challenge for farmers trying to decide on what insurance policy to purchase is compounded by the deadline to enroll in ACA marketplace plans: People needed to choose their ACA plan by Monday for coverage to begin Jan. 1. Open enrollment continues in most states until Jan. 15 for coverage beginning Feb. 1.

Despite broad public support for an extension to the ACA tax credits — a KFF poll said 74% of Americans favor continuing the enhanced credits — a congressional standoff has so far failed to produce a solution:

Failed Votes: Both a Democratic plan to extend the enhanced tax credits for three years and a Republican proposal to replace them with Health Savings Accounts (HSAs) failed to pass the Senate last week.
Impending Crisis: Nearly six in 10 enrollees (across all categories) told KFF they could not afford even a $300 annual increase in 2026 without significantly disrupting household finances.
Political Fallout: The issue of healthcare costs and expiring subsidies is highly polarizing, with some Republicans warning that a failure to address the problem could cost them legislative majorities in next year’s mid-term elections.

As the deadline for open enrollment closes and the Dec. 31 subsidy expiration date approaches, farmers must prepare for substantially higher health insurance costs in 2026 unless Congress acts to reach a last-minute agreement.

Young Farmers Need Better Options
During his testimony and ensuing discussion, Lehman stressed that healthcare isn’t just a personal household issue; it’s central to the future of American farming. With the average age of an Iowa farmer at 57, he said the sector desperately needs young and beginning farmers to return to the land. But without affordable, reliable health coverage, inviting the next generation back onto the farm becomes a far riskier proposition.

“You have to be very smart to figure out the plan that can bring the next generation on the farm,” he said, adding that many talented, innovative young people want to farm, but face daunting financial barriers — healthcare high among them. He noted that one of his sons works with him on their family operation, which is based in Polk County, Iowa.

Lehman framed affordable healthcare for farm families as an investment, not a handout: a way to make it possible for young farmers to feed their communities, support local and regional food systems, or continue larger family commodity operations.

“Extending the federal support for lowering the cost of health insurance is a true win for farmers and for all of rural America,” he said.

Thanksgiving Turkey Dinner Costs Dip By 5%

Wed, 19 Nov 2025 20:24:05 GMT

As families across America prepare for their Thanksgiving celebrations next week, the 40th annual American Farm Bureau Federation (AFBF) survey brings some welcome news for the wallet.

The classic Thanksgiving dinner for 10 people is projected to cost an average of $55.18, marking a 5% decrease from last year. However, this price point remains notably higher than five years ago.

A Long-Standing Tradition
Since 1986, the AFBF has tracked and reported the cost of a traditional Thanksgiving meal. Each year, volunteer shoppers from across the U.S. and Puerto Rico canvas local grocery stores—or their online counterparts—to record prices for a standard list of holiday staples.

The list of items surveyed for prices includes turkey, cubed stuffing, sweet potatoes, dinner rolls, frozen peas, fresh cranberries, celery, carrots, pumpkin pie mix and pie crusts, whipping cream, and whole milk.

This year’s grocery bill highlights several price shifts. Four key items saw a drop in price: the centerpiece turkey, cubed stuffing, fresh cranberries, and dinner rolls.

Conversely, five items—sweet potatoes, frozen green peas, vegetable tray, whole milk, and whipping cream—experienced price increases. Pumpkin pie mix and pie shells remained virtually unchanged from last year’s figures.

Regional Differences Contribute To Costs
For those celebrating in the West, the classic Thanksgiving dinner for 10 people costs $61.75, making it the most expensive region and approximately 12% higher than the national average. Families in the Northeast also face prices above the national average, with their classic meal coming in at $60.82. The South boasts the most affordable holiday meal at $50.01, closely followed by the Midwest at $54.38.

Americans living in the West will pay, on average, nearly $10 more per meal than those living in the South.

(AFBF)

If you expand dinner options to include ham, Russet potatoes, and green beans, including these additional items elevates the total meal cost for 10 to $77.09, or $7.71 per person.

Regionally, the South again offers the lowest total at $71.20, followed by the Midwest at $76.33. Both the Northeast and the West saw a jump in cost, reaching $82.97 and $84.97, respectively. The West once more stands out, with costs higher there than in other regions.

Turkey Takes a Back Seat in the Bill
Historically, the turkey has been the undisputed heavyweight on the Thanksgiving receipt, often accounting for an average of 43% of the total dinner cost. However, in 2025, a 16-pound turkey represents only 39% of the cost for a 10-person dinner—its lowest share since 2000.

Turkey prices have dropped for consumers this year because, in many instances, retailers are using them as a loss leader to attract shoppers.

(AFBF)

A 16-pound turkey will set shoppers back an average of $21.50, reports the AFBF, a significant 16% decrease from 2024. While fresh turkey prices continue to climb as the poultry sector battles highly pathogenic avian influenza (HPAI), the prices for frozen turkeys—the preferred choice for most Thanksgiving feasts—are steadily declining.

Adding to this trend, turkey demand outside of the holiday season continues to wane, with the average American consuming only 13 pounds of turkey per year, nearly 3 pounds less than six years ago.

Side Dishes Gain Weight on the Grocery Receipt
Despite the overall dip in Thanksgiving meal costs this year, side dishes now command a larger share of the total grocery bill. Price increases for fresh produce and essential baking ingredients underscore elevated costs throughout the entire supply chain.

Items like fresh vegetables and sweet potatoes registered some of the most substantial cost increases. A veggie tray is up by more than 61%, and sweet potatoes saw a 37% jump.

Several items saw price reductions this year, helping to mitigate the overall meal cost, according to the AFBF survey. Dinner rolls are down 14.6%, stuffing is down 9%, and cranberries are down 2.8%.

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New Coalition Hopes to Elevate Stories of Farmers in the Ag Labor Crisis

Mon, 27 Oct 2025 21:26:20 GMT

It’s no secret labor remains one of the most challenging issues in farming. To help advocate the need for labor reforms, a coalition of U.S. growers and ranchers, including specialty crops, livestock and dairy, have come together to create Grow it Here. Grow it Here officially debuted with a webinar that brought together growers, industry representatives and more to discuss the challenges facing agriculture today.

Kristi Boswell, adviser to Grow it Here and a former senior USDA official, says the organization will be a platform for growers to highlight the labor shortage crisis and to share the experiences of growers living through it.

“We hope that by raising farmer voices, we can complement the ongoing advocacy of the agriculture community to educate the public and the policymakers about the challenges farmers are facing and the need for ag labor reform today,” she says. “Farmers growing a variety of commodities, from fruits and vegetables to livestock and dairy from all across the country, will share with you their experiences and the challenges they face as they try to provide the safe, affordable and high-quality food to American families and around the world.”

Zach Rutledge, an assistant professor in the department of agricultural, food and resource economics at Michigan State University, says he’s studied farm labor markets for about six or seven years. In the latest National Agricultural Workers survey, about seven out of 10 farmworkers are born in another country, primarily Mexico, and a good share of farmworkers are not authorized to work in the U.S. legally.

Rutledge says he has surveyed growers to understand how labor shortages impact their operations.

“My surveys indicate that farmers are increasingly likely to experience a labor shortage, and that has been increasing over time. The most recent rounds of surveys I’ve done indicate that about half of the farmers are experiencing some degree of labor shortage,” he says. “The average shortage is about 20% of the labor force, so we have about half of the farmers reporting that they can’t hire all the labor they need, and then … the average shortage is about 20%.”

Rutledge says a peer-reviewed survey of fruit and vegetable growers shows a 10% reduction in labor supply causes as much as a 4.2% reduction in production and up to about a 5.5% reduction in farmgate value. And, when looking at California alone, farm labor supply has declined 1% per year.

“If we focus on California, that means even in just the top five counties that could cause a loss of $3.7 billion in lost revenue over the course of 10 years,” he says.

Grower’s Labor Crisis Stories

A major part of the webinar was to hear from growers across the country and in many different commodities. These growers shared how ag labor availability has impacted business decisions and more.

Lisa Tate, a fifth-generation citrus and avocado grower in southern California, says it’s important to remember this labor issue isn’t just about growers; it’s about everyday families who want affordable, healthy food grown in the U.S.

Tate says work runs year-round on her family farm, and that means large crews rotate between her family’s farm and neighboring farms. She says at one point, her family had partnered with three other farms to bring H-2A workers in, and she says the program’s housing requirements pose a specific challenge as the average home in her area is around $870,000, navigating the Mexican and U.S. visa application process proved difficult, providing transportation to and from the workers’ home country added to the burden, and then the farms needed to train the workers.

“Just as they were finally trained and comfortable, it was time to transport them back home again,” she says. “So, after trying the program, we realized we simply didn’t have the administrative resources or the logistical capacity to make that sustainable for our business.”

Tate refutes the notion that automation will solve this labor crisis in the immediate future.

“There are currently no machines that can do the work that these people do,” she says. “They just do not exist. So, every piece of fruit we harvest represents skilled human labor. In my county, it’s estimated that there are around 30,000 farm workers. About 3,000 workers are brought in each year under the H-2A guestworker program, which means that over 90% of the people who harvest, prune and care for our crops are already part of our local community, and about 10% of our agricultural workforce comes through H-2A. But even with both of those groups combined, we still face continuous labor shortages.”

Tate says a major challenge for growers is that rising labor costs aren’t something passed on to the consumer. Noting the rising cost of land, regulatory requirements and everything else needed for the H-2A program means often the grower doesn’t make any money on the crops grown.

“We’re price takers, so we pay all of our bills, and at the end, after all the bills are paid, then the farmer gets the money, and then if there’s anything left, and sometimes there’s not anything left, and we end up paying to harvest our crops or to provide food, and so so we don’t get an opportunity to pass that on,” she says. “So instead of us just not making money, that crop ends up going bad or being wasted or just not being harvested, and it’s just wasteful, and then we can’t compete with foreign agricultural commodities, and so it’s bad for the whole system in general.”

Tracy Vinz, owner of Olden Organic Farms in Ripon, Wis., says she’s used the H-2A program for five years now and says she would not be able to farm without her employees who come from Guatemala, El Salvador and Honduras.

“We unfortunately are in the middle of nowhere, but yet in the middle of everywhere. We are pretty centrally located in Wisconsin,” she says. “We are in small-town America, and people in our community around us just do not want to farm. We get an applicant here or there, and they come out in loafers and khaki pants and think: ‘Oh my gosh. You mean I’m going to get dirty?’ They don’t even make it through an interview without them saying, this just isn’t for me.”

Vinz says she and her husband often wonder what would happen to the fourth-generation farm without foreign labor.

“There’s no way we can do this,” he says. “Last year, some of our guys had to go back early, and we had to leave crops in the field. They weren’t harvested because we couldn’t do it alone.”

Fourth-generation blueberry grower, Brandon Raso of Variety Farms in Hammonton, N.J., says, like other commodities, the rising costs of the H-2A program have been a challenge for the blueberry growers in his area.

“We’re in a county that’s known as the blueberry capital of the world, and we are very dense with other blueberry growers, all neighbors, all very friendly, and watching farms, smaller farms, go out of business because they can’t get the labor to stay open,” he says. “We’re also watching the next generation, children of these farmers, not want to take that business over and therefore having to sell or watch the land go from farming to housing developments is very heartbreaking.”

He says this is in part to rising costs of labor, but Raso says rising blueberry imports directly threaten U.S. blueberry growers.

“We’re seeing is a rapid decrease in production nationwide with blueberries, and some of the holes in the market are being plugged with foreign imports,” he says. “These foreign importers of fruit, specifically in South America, don’t have a labor shortage, and they’re able to fill these gaps in the market. And it’s making it increasingly challenging for domestic farmers here in the U.S. to stay competitive.”

He says he wants his young daughter to join the family farm, but he’s not sure that’s possible given the current climate.

“I have to admit, it’s something I really don’t see possible unless we get this figured out,” he says. “American farmers are hurting everywhere, and the biggest challenge we all have is labor.”

Linda Pryor, a third-generation apple grower from Hilltop Farm in Hendersonville, N.C., agrees with Vinz, saying people in her community do not want to work on a farm, and the need for skilled workers to help with the orchard tasks means her family needs foreign-born workers, who bring generations of farming experience and knowledge to her family’s operation.

She says her family has put off farming decisions that could help her farm remain viable because of labor issues.

“We really are at the point that we need to plant trees that would produce more profitable varieties of apples, but we haven’t done that because the varieties that we would like to plant would require even more labor,” she says.

Pryor says with fresh produce there’s a very short window for harvest before quality begins to deteriorate.

“Farms are the beginning of the food supply chain and must have employees,” she says. “But it doesn’t stop there, either, because employees are needed every step of the way, from harvest to packing to shipping the produce to get it to the people that need it.”

Pryor says with H-2A being a voluntary guestworker program, the workers who come back every year choose to do so.

“I have an excellent return rate on my farm,” she says. “I know that many others do too, and the same people want to come back year after year and work with us. And it’s more than just employee-employer relationship with farming; you’re spending extremely long days, usually having all three meals of the day together. So, it’s much more of a family feel than an employee and employer feel. The success of my farm depends on them. I also appreciate the fact that they want to come and work.”

Grow it Here’s Goals

Tate says she hopes policymakers see this need for a long-term solution.

“If we want a secure, affordable and sustainable food supply in this country, then we need an immigration system that is both economically and functionally feasible for family farms,” she says.

Boswell says she hopes that Grow it Here can help elevate the voices of growers, educate policymakers and the public about the ag labor crisis, but is less of an advocacy organization and more of a platform for education.

“There are efforts all across the country highlighting the need for ag labor reform and the struggles that farmers are facing with their access to a legal and stable workforce,” she adds. “To me the fact that all of these continue to grow and exist is just how dire the situation is on the ground. And I think everyone is rallying together to share these stories, these testimonies, to encourage Congress to move forward long-term ag labor reform and also work with the administration on regulatory relief that can provide the short-term stability that we need.”

Raso says he hopes some revisions could help provide stability to the H-2A program and keep family farms in business.

“We are stewards of the land,” he says. “We try to provide quality produce, fruits and vegetables to the public. We’re asking to be recognized that this crisis is real, and it’s unfortunately too late for some farms, but the writing is on the wall for those of us who are still in business.”

From Despair to Hope: Why a Farmer on the Brink of Suicide Chose to Keep Going

Tue, 16 Sep 2025 15:41:22 GMT

It’s starting to feel similar to the 1980s. Not only are farmers on the brink of financial collapse, but there’s another grim reality setting in: The number of farmers dying by suicide is on the rise, and it could be at a rate U.S. agriculture hasn’t seen since the 1980s.

Even though statistics on suicides among farmers aren’t reliable from the 1980s because many were deemed “accidents” during that time, some estimates point to more than 1,000 farmers dying by suicide during that crisis.

“Unfortunately, it just almost seems like it’s a pandemic situation. I mean, there’s a lot of it, and it’s sad,” says Brent Foreman, a farmer in Shelby County, Mo., who knows the impacts of farmer suicides all too well.

“From an agricultural perspective, there’s a lot of stress in this industry, especially now,” Foreman says. “And somebody that’s contemplating this. I would say, we as farmers, we like to try to fix things, and we’re pretty good at it, but you can’t fix everything. If you get to a point like that, please reach out to someone, a family member, a good friend. Just please try to get some help.”

Touched By Suicide Three Times

Foreman isn’t just a fellow farmer concerned about the number of farmer suicides today. He’s a life-long farmer who’s been impacted by farmers dying by suicide three times, and the first loss happened when he was just 12 years old.

“My grandfather was a wonderful man, the most important male figure in my life,” Foreman says. “It happened 54 years ago, and it leaves a heck of a hole in your heart still today.”

Sixteen years later, his younger brother died by suicide, another sudden and tragic loss where there were no signs something was wrong.

“And then just a little over two years ago, my brother-in-law, who was 68, took his life,” Foreman says. “I’m telling you, it’s a devastating thing for loved ones to have to go through. It is tough. It’s really tough.”

Foreman says with his brother-in-law, there were signs he was struggling. He tried to take his life one time, but didn’t succeed. That’s when the family tried to get him help, which he agreed to, even going in for treatment.

“We thought that things were getting better, but they weren’t,” Foreman says. “At the beginning, I consulted our preacher, and I said: ‘I need some prayer and I need some advice.’ And he said: ‘Well, I do want to tell you something. I want you to be able to be prepared if you fail. Can you handle that?’ And I said: ‘Well, what I can’t handle is if I don’t try. I have to try.’

Experiencing three suicides, all by loved ones he was extremely close to, has been devastating. Foreman says the emotions are still raw today.

“It’s tough to live with, going through that so many times,” he says. “When I was a youngster I always told myself, the hurt, that’s something I would never do to anyone else. I just made like a pact with myself that I would never do that, because I’ve seen and lived firsthand how it affects you. From a family’s perspective, the pain goes on and on; it doesn’t quit. My wife, from her perspective, I can just see it in her eyes almost daily, the devastation.”

‘When We Lose Hope, It’s a Dangerous Place to Be’

When a person loses hope, that’s when the situation turns bleak.

“Sadly, that is the end all for a lot of people,” Jolie Foreman, executive director at Shelby County Cares , says. “Hope is key. If you have hope, you can keep going. When you lose hope, it’s just a very dangerous place to be.”

Lafayette County, Mo., farmer Ethan Daehler has been there.

“It was actually 2019 was kind of my low point,” he says.

Just six years ago, this Missouri farmer hit rock bottom.

“I was pretty much just down in the dumps, ready to just give up on life,” he says. “Thank the Lord something happened that kind of changed my way of thinking.”

In his early 30s, Ethan Daehler knows what it’s like to be on the verge of suicide. In 2019, he hit a low point. But something saved him, and he hopes by sharing his story, he will reach other farmers in a similar state of mind, reminding them that life is worth living.

(Ethan Daehler, Missouri Farmer )

Battling ongoing pain from an accident and stress of work, as well as struggles with the dynamics of a family farm, it all compounded the issue and pushed Daehler to a breaking point.

“I had a full-time job at the time working for another farmer and trying to do my own small operation,” he says. “We had family issues, which happens to a lot of farmers. There is a lot that compounds into thoughts, it’s just not financial problems, and I think that’s what people need to understand.

Daehler is now proof that it’s worth finding a reason to live, and he is only sharing his story to possibly save someone who’s in a similar spot as he was in 2019.

“There’s more to life,” he says. “I’m in a tractor now, baling hay, this is my fourth cutting. This is what I kind of dreamed of. Find something you love doing.”

A Mission to Prevent Farmer Suicides

That pain is something that fueled his daughter-in-law’s work. Jolie Foreman is the executive director at Shelby County Cares , a nonprofit whose goal is to improve the quality of life for children, youth and adults.

“I knew that we were very resource poor,” Jolie says. “So when I heard that this opportunity was available, we jumped on it, and we’ve just grown from the bottom up. We are definitely grassroots. They had faith in us in what our vision was, and they invested in it.

Through a grant,Jolie’s initial focus wasn’t suicide, but as she started doing research, she discovered there was a desperate need to provide help.

“My family had been impacted by suicide, and that’s kind of why I had jumped on board in the beginning,” she says. “But once we sat down at the table and really started to dive into the names and being in a small town, we know all of those lives that have been lost to suicide up here, that the producer was the one that was struggling.”

Fall Typically Heightens the Stress and Struggles

Jolie says they are currently seeing an increase in the number of farmer suicides happening across the country. Some of that is due to the various stresses involved with farming, but she says the fall is typically when the number of suicides in agriculture rises even more.

“In the spring, there’s a lot of hope,” Jolie says. “You’re planting, you’re coming off of the year that may have been good, may have been bad, but there’s always hope in the spring. And come September, I think the stark reality starts to set in either the pricing and the yields.”

September is Suicide Prevention Awareness Month , and when it comes to agriculture the facts are startling. Farmers are 3.5 times more likely to die by suicide than the general population. The suicide rate among male farmers, ranchers and ag managers is 43.7 deaths per 100,000 people, according to the National Rural Health Association.

The mounting financial pressures unfolding across the agricultural economy are adding another layer to an industry that already faces one of the highest rates of suicide compared to any other profession.

“Suicide is one of those things that’s hard to put on a scale,” Jolie says. “I mean we know the lives we’ve lost. We unfortunately can’t see the lives that we’ve saved, but I do know from talking to the local ambulance district that the calls have definitely increased; 988 is a huge resource here, and those calls have gone up and increased exponentially. And just through conversations I know that that rural agricultural piece is pressing behind it.”

She says one of the most startling discoveries she’s made during her research and work is the desensitization to death among farmers. She says through various conversations, it’s a reality that’s sad but true.

It’s Not Just Financial Stress That Causes Strains on Farmers’ Mental Health

Jolie says it’s not just financial stress that causes these struggles. It’s also the fact farming comes with many stresses, and for the most part, many farmers are so isolated and might not have access to adequate healthcare.

AgriSafe says if you’re a farmer, rancher, or farmworker, you already know that your work can expose you to a variety of hazards. They believe that with proper education and access to knowledgeable health professionals, farmers can live a long, healthy, and productive life.

(The Total Farmer Health Model, AgriSafe)

According to AgriSafe’s Total Farmer Health , the financial factor is one that can compound mental health struggles, but there are other factors that lead to the risks of farmer suicides including:

Weather
Sleep
Cognition
Social
Diet
Hazards
Spirituality
Healthcare
Fitness

Signs to Watch

And for family and friends, there are signs to watch out for, including neglect of the farm or ranch or even an individual who makes a big financial moves.

“Financial moves are also huge, which is why we’ve talked to attorneys, and we also talked to the financial providers like different banks,” Jolie says. “Are they moving their money? Are they giving away prize possessions? Are they changing their wills? Are they creating a sudden will? We just want to give those resources the tools that they need just to be like, ’Are you okay?’

Daehler says his message for someone in a dark place is you’re not alone. That message is something the Foremans also wants farmers to know.

“I want them to know that we care. I want to know they feed and fuel the world, but if their bucket is empty, they can’t pour into others,” Jolie says. “It’s OK to not be OK, to talk about it, to reach out, to ask your neighbor, to not afraid if you do see something or change in behavior or more isolation. Don’t be afraid to have that conversation. And there are a lot of people that care.”

Suicide Prevent Hotlines

It’s important to remember no matter where you are, there is help. 988 is the Suicide and Crisis Lifeline .

And for farmers, there is a specific farmer crisis hotline you can call that is toll-free at 866.586.6746.

The American Farm Bureau also has a Farm State of Mind campaign which builds awareness to reduce stigma and provides access to information and resources that promote farmer and rancher mental health wellness. You can visit that list of resources here .

Remember the Sugar Mill: Water Shortfall Looms Over Texas Ag

Tue, 26 Aug 2025 17:06:02 GMT

In February 2024, the board of directors of Rio Grande Valley Sugar Growers Inc. announced Texas’ last sugar mill would close. That sugar cane harvest and milling season was to be the Santa Rosa mill’s last.

Why? Mexico had starved the area for irrigation water.

“For over 30 years, farmers in South Texas have been battling with Mexico’s failure to comply with the provisions of the 1944 Water Treaty between the U.S. and Mexico that governs water sharing between the two nations on the Colorado River and the Lower Rio Grande,” the board wrote in its Feb. 22, 2024, announcement .

“We regret the impact our closure will have on communities across the Valley, especially those closest to the mill, La Villa, Santa Rosa, and Edcouch,” it added. The board described the mill as supporting up to 100 local sugar cane growers and employing “over 500 full-time and seasonal workers annually.”

There are two months remaining in the current five-year water cycle in the 1944 treaty, and Mexico hasn’t delivered even half of the water it owes. While it will likely send some additional water this cycle, it probably won’t make up the total.

The lack of full water deliveries will hit growers in the area hard, according to experts. But the lack of water will also hit the industries that support agriculture — and the people who work in those industries or supply them.

In one way or another, experts advise to remember the sugar mill.

Short- and Long-Term Impact on Growers

As produce growers in the Rio Grande Valley look to the prospect of a fourth year of water shortages in 2026, Dante Galeazzi, president and CEO of the Texas International Produce Association, says they will have to make some tough decisions soon.

“They’ve got to decide ‘what am I going to plant?’” he says. “We are sitting just barely better than we were last year at the same time. Not a whole lot better; we still don’t have the water we need to put in a full crop.”

The more distant future is more concerning, however.

“The longer term is perhaps an even more bleak picture for our farmers, unfortunately,” Galeazzi says. He points to the lessons of COVID when it came to big disruptions on supply chains and how markets don’t just magically rematerialize when the stressor goes away.

“If our industry is on average producing 30% less, that means someone else’s region picked up 30% more business. So, when we do get water — and we will have a hurricane and we will get water down here — we will have to fight tooth and nail to get any additional business we can. That really, in my opinion, is the big concern.”

But with growers being water-stressed for so long, that usually also means being profit-stressed.

“Folks down here aren’t all going to have the money to go out and reestablish market share, so that means they’re going to have an uphill battle trying to reclaim that space in the marketplace,” he says.

Impacting the Ecosystem of Agricultural Production

That dynamic applies to more than just growers, however.

“Everyone that goes into the ecosystem of agricultural production are all impacted by this,” Galeazzi says. This can be anyone from seed and chemical companies to the companies that make the boxes, pallets, and packaging for produce. He gave the example of trucking companies: “If they don’t have people to truck for, they’re out of business.”

Similarly, he highlighted the massive infrastructure that goes into making the H-2A program function smoothly — workman’s comp, staffing agencies, buses, housing — as an example of what can be lost.

Lucas Gregory, associate director and chief science officer of the Texas Water Resources Institute, explains the interconnected dynamic in the context of the sugar mill.

“If you have an irrigated operation, like a citrus grove or sugar cane, that has to have water, and if that water is not there, that’s it,” he says. “That’s what happened to sugar cane industry. There was not enough volume that could be guaranteed to keep the mill viable. So, the mill closed, and now with no mill, no sugar cane.”

A recent review by Texas A&M AgriLife Extension Service attempted to quantify what the impact of the lack of water deliveries from Mexico on citrus and vegetables in the area. The review estimates the region would lose $358.6 million annually and 6,079 total jobs lacking irrigation water.

“It’s a domino effect that’s felt within the community,” Galeazzi says. “In the four counties that make up the [Rio Grande Valley], something like 56% of the population lives outside municipal limits. That’s a lot of people who are going to be tied into agriculture in the rural community. Those are the guys who are going to get hit on top of the farmers.”

Impact on Irrigation Districts and Beyond

The effect of low water deliveries from Mexico is also real for irrigation districts.

Sonny Hinojosa, current water advocate and former general manager at the Hidalgo County Irrigation District No. 2 in San Juan, Texas, explains that irrigation districts in the state have two sources of revenue: the water delivery charge and a flat rate assessment. But both come down to delivering water.

“So, if we don’t have the water, we’re not generating revenue, and you have to start laying people off, and we don’t have money for improvements or maintenance,” he says.

That is the situation playing out in Delta Lake Irrigation District in Edcouch, Texas.

“That’s a big majority of my revenue to keep the doors open here and to keep my employees working and buying equipment,” says Troy Allen, the district’s general manager. “We normally rely on selling at least 80,000 to 120,000 acre feet of water annually to stay alive. And last year was a very, very tough year for us; we sold just a little under 30,000 acre feet worth of water.”

When speaking to The Packer in mid-August, he said the district has only sold 12,000 acre feet this year.

“We’ve really had to tighten our belts to survive,” he adds, explaining that his district usually employs between 51 to 55 people, but now only has 37. He says that, even with how tied into agriculture the region is, many people don’t realize “if we don’t survive, then the farming industry doesn’t survive.”

Hinojosa similarly described irrigation districts as little-known but essential entities in the Texas political landscape.

“We fall between the cracks. Municipalities get all the attention because of the population,” he says.

But negative impacts to irrigation districts are not just a farming issue; they also serve municipalities. Allen says his district serves a few small municipalities, though often at a loss. Galeazzi describes the whole network that depends on water from Mexico as likely to face adjacent economic impacts.

“If the irrigation company has no water, those guys are out of jobs. That infrastructure doesn’t get reinvestment, doesn’t get updated or modernized, further dilapidates, creates further inefficiencies,” he says. “That’s that adjacent community, that adjacent economic downturn, that’s happening as a result of this water scarcity the longer that it goes on in our region.”

Your next reads:

When Farmers Can Expect the Next Round of American Relief Act Payments

Tue, 03 Jun 2025 13:51:12 GMT

USDA is currently in the trenches of issuing the nearly $31 billion in total disaster and emergency relief aid to farmers and ranchers in four stages. That money was appropriated by Congress as part of the American Relief Act, which was passed in December of 2024. In an exclusive interview with Farm Journal on Monday, USDA Deputy Undersecretary Brooke Appleton said the next round of disaster aid payments could be coming the first full week of July.

USDA began issuing the $1 billion in emergency livestock relief program payments last week, which is the latest in a series of disaster and emergency relief. Appleton told Farm Journal that instead of holding the money and issuing it all at once, USDA decided to issue the payments in four phases, as USDA wanted to get assistance out to producers as quickly as possible.

“We had ECAP (Emergency Commodity Assistance Program) , we now have the Emergency Livestock Relief Program, we’re going to have supplemental disaster relief, and then we’re going to have another emergency livestock relief program to cover the flood losses that we saw in ‘23 and ’24,” Appleton said. “So, we’re kind of doing it in stages, it should stream out all through the summer really, and so I’m hoping that that kind of can relieve some of that financial stress.”

Appleton said USDA has issued $7.7 billion out of the appropriated $10 billion in direct payments under ECAP so far, which was the first stage of payments. Sign-ups for that program began in March. USDA initially issued 85% of a producer’s projected payment, with the remaining 15% expected after sign-ups close on Aug. 15.

Just last week, USDA announced the details surrounding $1 billion in Emergency Livestock Relief Program payments , which is the second phase of the American Relief Act. Those payments are being dispersed now, and it covers grazing losses due to eligible drought or wildfire events that happened in 2023 and 2024. That round of the program doesn’t require producers to sign up, as USDA is using existing information. Since the program was announced on May 29, USDA says it’s dispersed more than $641 million in payments to livestock producers who suffered grazing losses during that time.

“FSA is leveraging existing livestock forage disaster program data to streamline these payments and calculations to expedite that relief. So this was unlike most of our programs, farmers and ranchers didn’t have to go into the office to sign up,” Appleton said. “We already have the information. So those emergency relief payments were automatically issued to producers who had already had their data into their FSA office. And those payments started going out in earnest last week, so May 30.”

The next round of American Relief Act disaster aid payments is the Supplemental Disaster Relief Program, which is the larger amount appropriated by Congress. Appleton told Farm Journal details surrounding those payments are being prepared now, and USDA expects to issue those payments next month. The amount of money that will go out during the next round isn’t known at this time, as a USDA official says the agency is still “working diligently to balance the needs with the available funding.”

“The larger supplemental disaster program that is part of that is making its way through the process right now at USDA and other government agencies,” Appleton said. “The timeline for that, we’re targeting to sign up farmers by the first full week in July, so maybe the week of July 7. That will be literally every crop production loss that has happened for ‘23 and ’24, and that’s just additional disaster assistance that was legislated by Congress.”

Once those payments are released, USDA’s final phase of the American Relief Act will be another emergency livestock relief program, but this covers flood losses producers saw in 2023 and 2024.

Appleton says that’s been the most difficult program to outline and detail, as USDA has never administered a disaster program for livestock that covered losses due to flooding.

“We’ve never had a disaster program for livestock that triggered on flooding, so that piece of it is going to take us a little bit longer,” she said. “And that’s something that’s another piece of this larger disaster package. It’s going to roll out later this summer, but as these programs are ready to go and ready to roll out, we’re focused on doing it as soon as we can, rather than holding them all and doing it all at once. We want to make sure as soon is the assistance is ready to go, we are getting it out and we’re getting it to the folks who need it.”

Congress earmarked $2 billion for livestock losses due to droughts, wildfires and floods. The first livestock disaster aid announced last week totaled $1 billion, which means another $1 billion should be dispersed through the livestock disaster payments that cover losses due to flooding.

USDA says it is fully committed to expediting remaining disaster assistance provided by the American Relief Act 2025. On May 7, it launched its 2023/2024 Supplemental Disaster Assistance public landing page where the status of USDA disaster assistance and block grant rollout timeline can be tracked.

59% of Ag Economists Think Congress Won’t Pass a New Farm Bill Until 2026

Thu, 08 May 2025 20:25:18 GMT

It’s a contentious battle continuing to play out in Congress. Two years overdue, Congress still hasn’t passed a new farm bill, and as the calendar approaches the half-way point of 2025, optimism of passing a farm bill this year is waning.

The April Ag Economists’ Monthly Monitor found most agricultural economists think it could be 2026 before we see Congress finally pass a new bill. One reason why, according to agricultural economists, is the fact Congress passed $10 billion in financial relief payments late last year.

The April Monthly Monitor asked the nearly 70 ag economists surveyed each month when they think Congress will pass a new farm bill:

59% said 2026
24% think it won’t happen until 2027
18% said the second half of 2025.

April Ag Economists’ Monthly Montior

(Lindsey Pound)

None of the economists think Congress will pass a new farm bill in the first half of 2025. The survey also asked economists, “Does the Emergency Commodity Assistance Program (ECAP) program make it more difficult for Congress to pass a new farm bill this year?

62% said yes
38% responded no.

Most major agricultural groups argue that the current farm bill is outdated. Passed in 2018, it was designed to cover five years. Congress has passed an extension for two straight years that’s helped agriculture limp along, but another extension might not suffice in addressing the current financial pain being felt on the farm, especially for cotton and rice farmers.

Other Hurdles for Passing a Farm Bill in 2025

Even with the GOP in control of the House and Senate, it’s no secret one of the main obstacles in passing a new farm bill, or any bill in Washington, is the budget.

The April Ag Economists’ Monthly Monitor asked economists what are the biggest hurdles in passing a new farm bill, the top response was budget. But economists also say Congress is racing against a calendar, and deeper cuts to SNAP could end up hurting agriculture priorities in the end. One economist even argued ARC and PLC just aren’t effective programs.

“The farm bill just isn’t as important to the administration as is getting their policy agenda through Congress,” said one economist.
“The budget. If farm legislation is approved in 2025, it will likely be part of the budget reconciliation bill and passed without Democratic support, meaning increased support for farmers is provided by deeper cuts in SNAP. Only if that effort collapses is there any real possibility of a bipartisan farm bill,” said another economist in the anonymous survey.
“In general, Congress has difficulty passing any legislation. This is very detrimental to the long-run health of U.S. agriculture and the U.S. economy. We simply have to address entitlements and deficit spending in the next few years.”
“If the new farm bill has to have no new spending similar to the 2018 farm bill, then which title wins and which title loses is the biggest fight,” an economist said in the April survey.
“They have to be working on a bill first. Currently, I do not think a bill is even in the works,” said another economist.
“Pushing back on SNAP,” stated an economist.

Bottom line: The likelihood of passing a farm bill this year is low. Both the Senate and House Committees say it’s a top priority and are working behind the scenes to get a farm bill passed this year, but similar bottlenecks remain, which are a lack of additional funding and a polarized Congress. Debates were heated this week, and the blame game continues. Until Congress can find a way to compromise on Title I and SNAP, the stalemate could continue.

Concerns About a Recession in Agriculture

The farm economy doesn’t seem to be improving. The latest Ag Economists’ Monthly Monitor shows agricultural economists are also growing more pessimistic about the ag economy. The April survey found 72% of ag economists say the row crop side of agriculture is in a recession, up from 62% last month. Eighty-two percent of economists also think this could force more consolidation in agriculture.

California Winegrape Growers Hope Trump's Tariffs Can Save Their Industry

Mon, 21 Apr 2025 21:12:15 GMT

California is the first state to sue the Trump administration over tariffs. Gov. Gavin Newsom made the announcement last week on an almond farm in the Central Valley, saying 43% of the state’s almonds, pistachios and dairy products are export dependent.

Newsom says no state is poised to lose more due to the tariffs than California, but not all farmers agree. California winegrape growers and producers like Rodney Schatz hope tariffs can help save the waning wine industry in the state.

“It’s tough now in the fact that the world market really is affecting everything we do. [That’s] on top of the fact that we’re in California where regulations are even more dramatic than most places could even imagine,” Schatz told Farm Journal.

2025 Could Be the Most Challenging Year Yet

Schatz is a third-generation grape grower and wine producer, situated just outside of Lodi, Calif., which is home to nearly 40% of California’s premium wine grape production. He’s been in the business for 50 years and coming off of one of his most challenging years yet.

“This is going to be a very tough summer, because right now there’s no activity by wineries purchasing fruit for this upcoming harvest, which is about five months away,” he adds.

The fact Schatz thinks 2025 could be more severe than 2024 says a lot considering some growers left entire vineyards unharvested last year, as they had no home for their grapes.

“It was probably one of the worst harvests we’ve seen in the last 50 years,” says Stuart Spencer, executive director for the Lodi Wine Grape Commission. “There were an estimated 400 to 500,000 tons of grapes across all of California that went unharvested.”

Spencer estimates 15% of the total crop in California went without a contract in 2024, which means those growers left that crop to either wither on the vine or rot in the field.

“This was the lightest harvest we’ve seen in 20 years, going back to 2004, and a good part of that was because of the unharvested grapes where there was just no market for them,” Spencer says.

Schatz harvested every acre of his grapes last year — a decision he now regrets. And that means he’s already making tough calls for 2025.

“What we’ve done is since harvest last year, we’ve already removed over a hundred acres of vineyard. So, we just took them out,” says Schatz. “And the last piece that’s being kind of considered sits in front of my home ... . I didn’t even prune it, so it’s probably going to come out through the summer as well.”

What’s Causing the Wine Industry to Hit a Wall?

Schatz is trying olives and different crops to diversify, working to weather the current storm. The reason? Well, it’s complex. It goes back to too much supply, not enough demand, non-tariff trade barriers hitting the wine industry especially hard, and a flood of imports.

“A big issue now, being in a world market, there’s wine grapes produced throughout the world and wine coming from all over the world to the United States. That’s going to be our biggest challenge,” says Schatz.

“There’s still a great deal of uncertainty in the marketplace, and then the whole trade tariff discussion has added additional uncertainty to it,” says Spencer.

After 30 years of growth, Spencer says demand for wine has shrunk the last three years. But there’s also a global oversupply of wine from places like Europe, Australia and South America.

“Consequently, that’s left a lot of farmers — you know, the grower is kind of the last on the food chain and left without a home to sell their grapes, and that’s what we’re seeing right now,” he says.

35% of the Wine in the U.S. is Imported

Even prior to the recent tariffs, demand for U.S. wine was on the decline. With a slump in wine sales, that’s created a deficit in demand, says Chris Bitter, senior wine analyst for Terrain.

“Approximately 10% of U.S. grape or wine production by volume is exported,” says Spencer. “So, it’s a relatively small portion. And in terms of the U.S. market overall, we import about 35% of the wine that is sold in the U.S.”

Since more wine is imported than exported in the U.S., Schatz believes President Donald Trump’s push for tariffs could be a turning pointed for family-owned vineyards in the U.S.

“Here’s how hopeful I am: I’ve lost, in the last couple weeks, deals into China — of course Canada’s on hold — and into Sweden,” says Schatz. “So, these are places where we semi-regularly send wine to, and they’ve all run for the hills and said these deals are on hold and we’re not going to ship those wines. So, that even backs us up more.

“OK, fine, and I’m willing to stomach that,” he continues. “I’m hoping these tariffs change the dynamics right here in the United States. I would much rather do business right here than ship overseas.”

But not everyone is in that boat. Bitter isn’t confident that throttling back the amount of wine imported will translate to more domestic wine being sold and consumed in the U.S.

“It’s going to vary by location, by variety, by type of wine,” says Bitter. “So, it’s a complex issue. But at this point, I’m not seeing those tariffs as kind of the potential solution to the problem facing the grape market. While there could be some benefits in some areas, I don’t see that as something that is going to be turning the tide for grape growers in this state.”

As Bitter stated, the wine industry is complex, which is why the answer isn’t simple.

“Wine is highly regulated because it is an alcoholic beverage. And in the United States, we have something called the three-tier system where it is mandated that to import wine, you first have to import it through an importer. That importer then sells it to a distributor, and then that distributor sells it to the retailer,” says Bitter. “So, at all the various stages of that chain, the business doesn’t necessarily have to pass on that full tariff.”

Bitter says that means it’s unlikely to be a one-for-one increase with the tariffs, and distributors and retailers may find ways to eat those costs in the short-run.

“Now, if the tariffs last for a long period of time and are perceived to be permanent, we might see a switch in that. But I think that we will probably see some increase in differential between imported wines and domestic wines, but i don’t think it’s going to be as big as the kind of headline tariff numbers that we’re seeing,” Bitter says.

Canada is the top export market for the U.S. today, according to Spencer. In response to the Trump administration’s tense rhetoric regarding the country, Canadian liquor buyers, which are government controlled, have essential quit buying U.S. wine and spirits.

“And that one is problematic, because they’ve removed all California or U.S. wines and spirits from their store shelves. And so, that has had an impact,” he says.

But on the domestic side, Spencer says orders coming from areas of Europe, Australia and South America are on hold.

“On the domestic side of things though, and specifically coming out of Europe, we have already heard of a lot of orders getting put on hold, going both directions,” says Spencer.

“We have also heard indirectly that, you know, some of the orders have been picking up domestically for some of our wineries as well, too,” he adds.

Is There Enough Domestic Supply of Wine?

Spencer says from retailers to restaurants, some reports say there’s not enough domestic supply to make up for the imports that could be lost. That’s a claim he says simply isn’t true.

“Well, there’s thousands of tons unharvested last year that the tanks are full with wine, so there is definitely a spot for this domestic wine, yes,” he says. “It’s not all completely interchangeable, but at the same time, there is still a lot of opportunity domestically here to support California wines and domestic wines.”

For Bitter, it depends on the category and the types of grapes or wine. Sparkling wine is one example, he says. The U.S. imports 60% of all sparkling wine sold in the U.S.

“We don’t have the capacity to make up for that level of switch to domestic wines, so we don’t the capacity produce enough sparkling wine. To fully offset that if foreign sparkling wine sales fell to zero, we simply don’t have the capacity to do that, at least in the short term,” says Bitter. “But at the high end, folks who are drinking like high-end burgundies or Champagne or Bordeaux bridles may not see domestic wines as a direct substitute for what they’re drinking. So, they might drink less as opposed to just switching to domestic brands.”

Growers are Hopeful Tariffs Can Give California Farmers a Fighting Chance

Considering roughly one-third of the wine consumed in the U.S. is imported wine, grape growers and wine producers like Schatz are hoping the move to slow imports could give California farmers a fighting chance.

“If you go to your local grocery chain and there’s a floor stack of, say, this time of year you’d have a pink rose from Provence, and it’s beautifully stacked and labeled, and it sitting there and it’s $6.99 a bottle — that is what I’m hoping is clocked. That’s where my wine can come in,” he says. “And so a lot of these imports plop down on the floor, and I’ll never get a chance to compete with them. So, I’m hoping this tariff puts a kibosh on some of that and allow some of our wines to come in.”

Your Next Read:
Grape Growers Desperately Need You to Drink More Wine as They Grapple With a Glut of Uncontracted Grapes

Navigating the changing situation of tariffs

Poll Results: More Than Half of Farmers Say They Don’t Support Trump’s Use of Tariffs

Mon, 24 Mar 2025 18:38:30 GMT

President Donald Trump has been clear since the campaign trail: Tariffs are a tool he would use aggressively during his presidency, and that’s exactly what the president is doing as tariffs have become a bit of a trademark during Trump 2.0 and the first 100 days.

As he prepares to impose more tariffs on April 2, Trump said Monday that he will impose tariffs of 25% on any nation that purchases oil from Venezuela.

“Venezuela has been very hostile to the United States and the freedoms which we espouse. Therefore, any country that purchases oil and/or gas from Venezuela will be forced to pay a tariff of 25% to the United States on any trade they do with our country,” Trump said in a post on Truth Social.

As both targeted and blanket tariffs are applied, retaliatory tariffs on U.S. agriculture are also caught in the middle of the latest trade war. How do farmers feel about this? That’s exactly what we wanted to uncover during the latest AgWeb poll.

The latest AgWeb poll asked, “Do you support President Donald Trump’s use of tariffs as a negotiation strategy?” And even though the majority of farmers say they don’t support Trump’s use of tariffs, according to the recent AgWeb poll, it wasn’t on overwhelming majority.

(AgWeb Poll)

Out of the nearly 3,000 farmers who responded,

54% responded “no”
41% responded “yes”

The poll then followed-up by asking, “Do you believe USDA will compensate farmers for losses if agriculture is affected by a trade war?”

The responses here were much more mixed.

36% responded “no”
34% said “yes”
30% responded they were “unsure”

What are farmers saying in the field? Michelle Jones, a fourth-generation farmer in south central Montana was asked the question about if she supports Trump’s use of tariffs on “AgriTalk” last week.

“No, definitely not,” Jones said. “I don’t think that tariffs are an effective negotiation strategy, and I also don’t think that we’re truly being surgical in how we are applying them.”

Jones says there are cases in history where tariffs are effective, but she says in the majority of those cases, the tariffs are extremely targeted and apply to a certain industry or specific country.

“They were also very short-term whereas now, we’re just using them as basically a blanket approach and then escalating when the president gets angry, and then he rolls them back, and it creates too much uncertainty. It’s just not wildly effective,” Jones also said on “AgriTalk.”

“I agree, they were used before the Phase One deal with China, and they were never dealt with under the Biden administration either,” added April Hemmes, an Iowa farmer, who was also on “AgriTalk” last week. “Now all we’ve done is piss off our neighbors with this, the Canadians, bringing Canada and Mexico into it. And now all consumers are going to have to pay up, not just the farmers.”

However, there are some farmers and those in agriculture who support the president’s heavy use of tariffs. One of those is Bubba Horwitz of Bubba Trading, who focuses on the commodity markets.

“I think it’s a great tool to use,” Horwitz said on “AgriTalk.” “I think you’ve seen it with Canada and Mexico to get things that he wanted to get done. And certainly, you can bargain with those tariffs, you can do whatever you want. I think it’s a great negotiating tool, and it certainly can put pressure because remember one thing, the United States of America could stand alone. We could be an island without anybody. We don’t need anybody else to survive, whereas other countries and nations do need us to survive. We could be totally an island and exist perfectly well without the help of any other country in the world.”

Secretary Rollins Defends Trump’s Use of Tariffs
During a recent interview with Fox News’ Maria Bartiromo, Agriculture Secretary Brooke Rollins defended the president’s use of tariffs, also saying he’s holding Canada accountable.

“This president’s vision of tariffs being such an important part of his toolkit, as he begins to realign the economy to put America first, to put our men and women, our families first. Everybody knows, and when they voted in November of 2024, they knew that’s what they were voting for. And so as we see the president begin to roll out, as we see him hold accountable Canada with their 250 % tariffs on our dairy products, as they see him hold accountable, Mexico, China, all these countries where we have a 5 % on our end when our products go out. They’ve got 15 %,so three times, this is on average on their end when their products come in. It’s not fair. And it’s got to be equalized as we move toward more free trade,” said Rollins.

Rollins pointed out the president has been very clear that there will be an interim period where the economy readjusts.

“Real transformation takes these harder decisions. And no one’s willing to do that, except now President Trump is,” Rollins said during the interview. “So obviously 100 % behind it, I am talking to farmers every single day. They know that the president has their back. They know and are prepared for potentially, you know, an interim period as we move toward what the president has said is the greatest age of prosperity not just for all Americans, But for our farmers in our ranchers as well.”

Ag Economists are Concerned About Tariffs and Impact Long Term
Farm Journal asked a similar question regarding using tariffs to negotiate in the March Ag Economists’ Monthly Monitor, and the survey found an overwhelming majority of economists are concerned about the impacts long term.

Ninety-two percent of economists think Trump’s strategy of using tariffs as a negotiating tool won’t benefit U.S. agriculture in the long run.

“Lost trade and lost reliability in a key sector for aggregate ag demand will hurt agriculture more than any specific market gains made from negotiations or reciprocal trade battles,” one economist said.
“Tariffs not only have a negative impact the short run, they also have negative impacts in the long run,” said an economist in the anonymous survey.
“Lost market share is extremely difficult to regain, especially when the U.S. becomes known as an unreliable market partner,” another economist noted.
“I responded yes, although I believe there are scenarios where this is harmful and scenarios where it could be beneficial,” said another economist. “For it to be beneficial depends on it being short lived and resulting in trade initiatives with market access or purchase commitments. And in the meantime, action is taken quickly related to President Trump’s post to offset trade loss with increased domestic use such as removing dated rules that limit ethanol blends, renewing or creating biofuels production incentives, and adding SAF as a mandated fuel.”

Market Facilitation Program 2.0?
If agriculture is caught in the middle of another trade war, the March Ag Economists’ Monthly Monitor wanted to know if economists think USDA will compensate farmers for their losses again, similar to what the previous Trump administration did with Market Facilitation Program (MFP) payments.

Even though Secretary of Agriculture Brooke Rollins has promised to make farmers whole through another trade war, economists are concerned about available funding.

Seventy-seven percent of economists think USDA will compensate farmers, but 23% don’t think so.

Here’s what economists in the March Ag Economists’ Monthly Monitor had to say.

“Congress might be the limiting factor,” one economist said.
“They will want to do so, but their ability to do so may be limited. The failure to include replenishment of the Commodity Credit Corporation’s borrowing authority in the continuing resolution limits available CCC funds, and other options may also be limited in potential scope,” another respondent shared.
“Yes, I expect more trade compensation because of the political sensitivity of ag and the administrative commitments already to doing so. I don’t know what and how much it might be, particularly if we are entering a new era of budget austerity or at least stated goals of budget restraint,” responded one economist.
“Depends on who is calling the shots Trump or Musk,” another economist noted. “Trump might want to because farmers voted for him. But will he spend the money? He probably would. But, who else are farmers going to vote for? Is Trump running again?”
“Tariffs are not good revenue creators — they are a poorly targeted tax on U.S. consumers. If the federal government believes it will raise revenue from these tariffs like it claims, it is hard for me to believe that they will turn around and give that limited revenue back to the people it impacted the most,” said an economist in the anonymous survey.

No matter what happens with the upcoming April 2 tariff deadline, economists agree that what happens with trade and tariffs will likely be the top factor that impacts agriculture over the next 12 months.

In a recent interview on “AgriTalk,” hear where Sen. Chuck Grassley, R-Iowa, stands on fair trade versus free trade.

92% of Ag Economists Say the U.S. is Already in the Middle of Another Trade War

Fri, 21 Mar 2025 14:47:55 GMT

President Donald Trump hasn’t been shy about using tariffs as a negotiating tool. As he cracks down on fentanyl and illegal border crossings, he’s also pushing to restore what he calls fairness in U.S. trade relationships and countering non-reciprocal trading arrangements.

The reality for agriculture is the U.S. agricultural trade deficit hit a record in 2024 as imports soared, and Trump says he wants to reverse the trend.

According to the Trump administration, when it comes to tariffs and the impact on the overall economy, long-term gain will be worth the short-term pain. However, when it comes to agriculture, ag economists survyed in the March Ag Economists’ Monthly Monitor don’t agree.

Ninety-two percent of economists think Trump’s strategy of using tariffs as a negotiating tool won’t benefit U.S. agriculture in the long run.

Here are some of those economists’ comments from the most recent Farm Journal Ag Economists’ Monthly Monitor survey.

“Food as a weapon doesn’t have a successful track record, see Jimmy Carter and the 1980s,” responded one economist in the anonymous survey. “It’s not a guarantee as it’s like playing Russian roulette; you might ‘win,’ but the risks are huge.”
“Farm Journal readers should learn about the long-term consequences of Smoot-Hawley. It wasn’t just about the economic costs — it was also about the relational damage between trading partners. I have a hard time believing we will rebuild these relationships any time in the foreseeable future,” another economist said.
“It depends on whether tariffs are used as a negotiating tool with the ultimate goal of reducing trade barriers, or whether they instead result in a world with higher barriers. The president’s emphasis on tariffs as a way to raise revenue suggests tariffs and their consequences may persist,” was another economist’s response in the Monthly Monitor.

However, one economist wasn’t as certain, saying, “For it to be beneficial depends on it being short lived and resulting in trade initiatives with market access or purchase commitments. And in the meantime, action is taken quickly related to Trump’s post to offset trade loss with increased domestic use such as removing dated rules that limit ethanol blends, renewing or creating biofuels production incentives, and adding SAF as a mandated fuel.”

Trade War or No Trade War?
What an overwhelming number of agricultural economists do agree on is that the U.S. is in the midst of another trade war. Ninety-two percent of economists say a trade war is already here, while only 8% responded no.

“I don’t think anyone is arguing with the notion that we are in another ‘trade war,’” one economist said. “This one is far bigger and far more consequential than the last one we were in.”

“It seems more like a trade cold war,” another economist responded. “The situation is ever-changing, and it is hard for buyers, markets and producers to anticipate reality and effect. The threat of tariffs is almost as effective as a tariff.”

As agriculture tries to navigate the turbulence and shocks of another trade war, the ultimate question is: Who wins in a trade war? According to Romel Mostafa, professor of business, economics and public policy for the Ivey Business School in London, Ontario, it’s neither the U.S. or Canada.

“If we think about U.S. and Canada, we both lose,” Mostafa says. “The way our markets are integrated, both from the input side as well as the product side, any tariff really increases cost of production for our farmers all the way to food on the table. What then happens, essentially, some of our products are going to be less competitive in major markets than where we compete. Who then benefits? Perhaps Brazil, Russia or other countries.”

Other agricultural economists agree: If you’re looking at the trade war between the U.S. and Canada or the U.S. and China, it’s not the U.S. who wins, it’s ultimately one of the United States’ biggest competitors: Brazil.

The Ag Economists’ Monthly Monitor asked, “In the next 10 years, which country ultimately benefits the most from the current trade turbulence?” Seventy-three percent of economists think it’s Brazil, and 18% said China.

This Trade War Could Be Worse Than the Last time
Of the agricultural economists surveyed, 69% say they don’t think a trade war today would have the same impact it did 2018 through 2020. Instead, most think it will be worse.

“The trade war in 2018/19 also had the African swine fever in China. Because of ASF, they did not need the soybeans anyway. It will be hard to figure out what impacted the U.S. markets/prices more, but the market reaction should not be as great this time,” said one economist in the monthly survey.

Ag Econoimsts’ Monthly Monitor

(Lindsey Pound)

“It would be a bigger impact,” another economist said. “The first round of trade wars in agriculture were largely used as a wedge for negotiation or renegotiation of agreements that provided improved access and growth opportunities for ag trade. This round seems to be championed based on reshaping the entire trading system, a system that U.S. agriculture largely benefited from over time.”

“There appears to be less willingness by the U.S. taxpayer to provide financial assistance to agricultural producers. That is not to say that financial assistance is absent this go around, but I do believe it increases the uncomfortable situation for producers who largely support less government spending,” one of the respondents shared.

However, other economists think it could have a similar impact, saying the same commodities will be impacted.

Even talk of tariffs is enough to move the markets, as some analysts argue the commodity markets have been ignoring fundamentals, instead trading headlines recently.

The Potential Economic Hit to Ag
The American Farm Bureau (AFBF) economists recently took a deeper dive into the possible impact of reciprocal tariffs. AFBF economists say of the top 20 U.S. agricultural products currently being targeted by Canada, for a total of $5.8 billion, commodities such as juice, coffee and chocolate are hardest hit, along with wine, fresh fruit, dairy products, poultry and rice.

Canada’s retaliatory tariffs

(AFBF)

China’s retaliatory tariffs

(AFBF )

When it comes to China, Beijing has specifically targeted 15 products including beef, cotton, grain sorghum, pork, corn and dairy along with fresh fruit. Economists say while it’s too early to measure the full impact of the tariffs on U.S. agriculture, they believe it will certainly decrease demand for U.S. products in Canada and China.

Market Facilitation Program 2.0?
If agriculture is caught in the middle of another trade war, the March Ag Economists’ Monthly Monitor wanted to know if economists think USDA will compensate farmers for their losses again, similar to what the previous Trump administration did with Market Facilitation Program (MFP) payments.

March Ag Economists’ Monthly Monitor

(Lindsey Pound)

Even though Secretary of Agriculture Brooke Rollins has promised to make farmers whole through another trade war, economists are concerned about available funding. Seventy-seven percent of economists think USDA will compensate farmers, but 23% don’t think so.

“Congress might be the limiting factor,” one economist said.

“They will want to do so, but their ability to do so may be limited. The failure to include replenishment of the Commodity Credit Corporation’s borrowing authority in the continuing resolution limits available CCC funds, and other options may also be limited in potential scope,” another respondent shared.

“The political dynamics appear to be similar,” said another economist. “Amounts are however likely to be less, maybe substantially less, due to the general policy initiative to reduce government spending.”

The Secretary of Agriculture has come out and said they will use these tools if it becomes necessary.

Ag Lenders: Just Over Half of Farmers Will Be Profitable in 2024

Wed, 19 Nov 2025 19:13:57 GMT

The American Bankers Association (ABA) and the Federal Agricultural Mortgage Corporation (Farmer Mac) have released their joint 2024 Ag Lender Survey.

The big takeaway: lenders believe only 58% of farmer borrowers will be profitable in 2024. That’s down from 78% in the previous year’s study.

“The agricultural economy is inherently cyclical, and ag lenders are navigating the changing conditions across the sectors they serve,” said Jackson Takach, chief economist of Farmer Mac.

“While the responses highlight slowing land values and a profitability shift from crops toward animal proteins, ag lenders remain steadfast in leveraging their resources and relationships to guide producers through all parts of the cycle,” Takach says.

Profitability expectations did vary by region and commodity category. Optimism was greater for livestock producers over row crop farmers.

The two top concerns listed by lenders for agricultural producers are liquidity and farm income.

For lending institutions, the respondents said the biggest concern was credit quality along with agricultural loan deterioration in the next 12 months.

“Agricultural credit quality remained robust in 2024, but lenders expect deterioration in the coming year as farmers face a more challenging environment,” said Tyler Mondres, senior director of research at the American Bankers Association. “Lenders are taking prudent steps to manage risk such as tightening underwriting standards, and they remain committed to working with and supporting their borrowers.”

Demand for loans secured by farmland and agricultural production loans increased in 2024, and both categories of loans are expected to rise in the next year as well.

The ABA/Farmer Mac survey has been conducted for nine years, and this year’s responses included more than 450 ag lenders who represent institutions ranging from less than $50 million to more than $1 billion.

You can read the full report here

The Reasons Fewer Farmers Are Now Responding to USDA's NASS Surveys — And the Impact of Waning Participation

Fri, 12 Jul 2024 15:17:49 GMT

U.S. taxpayer-funded government reports on the economy and agriculture have generated comments from stakeholders and others, especially since the Internet has made it easier for anyone to comment.

We decided to check in on response rates for USDA’s National Agricultural Statistics Service (NASS) reports after a new study by the American Statistical Association warned the reliability of U.S. economic data is at risk due to shrinking budgets, declining survey response rates and potential political interference (this is not the case with NASS reports). Currently, government statistics remain dependable, but the study, authored by statisticians from various institutions including George Mason University and the Urban Institute, likens the statistical system to infrastructure that is often neglected until a crisis occurs. (The New York Times addressed the matter in this article .)

Note: We contacted several current and former USDA officials and asked them to comment about the numbers and some of the responses in this special report. These individuals include Lance Honig, Director of Methodology Division, Chair, Agricultural Statistics Board, USDA-National Agricultural Statistics Service; current top USDA economist Dr. Seth Meyer; and Dr. Joe Glauber, former top USDA economist.

Here’s a breakdown of response rates for USDA’s NASS reports:

Response rates have been declining over time:

• In the early 1990s, response rates for NASS crop surveys were 80% to 85%.

• By the late 2010s, response rates had fallen below 60% in some cases.

Recent response rates for specific NASS surveys:

• The 2022 Census of Agriculture had a response rate of 61%.

• The 2017 Census of Agriculture had a response rate of 71.5%.

• For monthly NASS surveys, response rates are around 75%.

• For quarterly or annual NASS surveys, response rates are around 50% to 60%.

Factors affecting response rates:

• Increasing difficulty in accessing households due to new telephone technologies.

• Rising refusal rates from respondents — “It’s mostly inability to reach people that’s increasing. Actual refusals are fairly steady,” Honig says.

• Concerns about data privacy and time constraints from farmers.

• Increased number of people requesting information from farmers.

Impact of declining response rates:

• Reduced statistical precision of estimates, especially at the county level.

• Fewer counties for which estimates can be published.

• Potential introduction of bias if non-respondents differ from respondents.

USDA NASS efforts to address declining response rates:

• Offering online response options.

• Developing shorter questionnaires.

• Adjusting sampling and weighting procedures.

• Increasing follow-up efforts through multiple contact methods.

• Increased outreach efforts to build relationships/trust and increase transparency (i.e. #StatChat, Data Users’ Meetings, Visitors to Lockup, etc.)

Importance of response rates:

• High response rates are crucial for maintaining data quality and reliability.

• Lower response rates can lead to increased costs for data collection.

• Accurate data is essential for policymaking, research and agricultural planning.

Bottom line: NASS continues to monitor response rates and implement strategies to improve participation in their surveys, recognizing the critical importance of high-quality agricultural data.

Ag industry chimes in about the relevance of NASS reports and the response rates:

• “Accurate data primarily allows transparency in the marketplace, otherwise you get misinformation on social media and conspiracy theories due to what analyst one listens to. It does not create a level playing field for all.”

• “While people complain in the U.S. that big companies have all the information, USDA’s NASS allows one point of solid information that everyone can trade off of.”

• “While there are shortcomings, NASS provides the best source of agriculture data anywhere in the world. It has allowed U.S. agriculture to thrive. Going forward, policymakers need to understand they need to fund the service to help farmers, agribusinesses and consumers.”

• “This is a topic every year on the Pro Farmer Midwest Crop Tour because it’s a debate on how accurate NASS is with their crop estimates. Farmers want to complain NASS isn’t that accurate, but they don’t want to give NASS any insights, either (the trust issue).”

Note: NASS publishes a report each year that shows the accuracy of its estimates.

• Several growers said they don’t trust the government and they aren’t giving out their data. One said: “You just wonder with all the technology on planters and combines today, as well as all the satellite info, when NASS will have to change their approach.”

Honig response: “NASS is exploring the potential of using precision ag data, but significant hurdles currently exist, primarily around ownership/availability of the data. Satellite data are currently utilized to augment the survey and administrative data.”

• “I think the response rate is way below 50%. Some of these guys are big farmers and do not want to share data. Plus, they all think NASS’ quality has declined so why give data to a failing entity?”

• “Grain stocks on farm has been a big topic amongst the elderly grain traders I keep in touch with. Most think the basis is a much better indicator than NASS. For example: Why is the cash corn basis so strong in the WCB this year, yet ECB stocks are reported by NASS to be huge. Meanwhile, Cn/Cu is trading an inverse during delivery and the delivery points are in the ECB.”

Honig response: “NASS stocks estimates represent quantities stored by location, but do not indicate whether or not those quantities are all still available to be marketed (i.e. some/all may already be contracted/committed).”

• “Why can’t crop insurance yield data be used to compare to NASS plot data? I would argue crop insurance yield data is probably the most accurate data currently available. Since crop insurance is a federally subsidized program, let us see the data.”

Honig response: “NASS can use these data for evaluation purposes, but timing is a big issue with these data. Data are only provided once for each season, and not available until late-spring/early-summer the year following harvest. NASS publishes yield forecasts throughout the growing season and provides final season estimates in early January for most major row crops (late-September for small grain crops).”

• “Social media (SM) has turned everyone into an analyst that feels they get ‘enough’ data from SM to determine crop size. Then they go on a drive and look for confirmation of what they expect to see and, of course, they find it. Now they are armed with 4 hours of research on ‘X’ and what they saw on a 200-mile round trip, and they think they have the U.S. crop figured out. When NASS reports something different than they expected, the first thing they do is get back to SM and tell everyone how wrong NASS is. When NASS reports something in line with their expectations, the first thing they do is get back to SM to tell everyone how right they were before NASS put out its guess.”

Honig response: “Agreed — and people commonly assume because NASS estimates don’t match what many expected that they are wrong. Expectations are often based on limited information.”

• “Distrust not just of USDA’s NASS but of anything to do with or organized by the government. Some refuse to respond while others (very few, but it happens) falsely respond and then complain (loudly) about how wrong NASS is.”

Honig response: “More data always leads to increased accuracy, so responding to surveys is the best way to make things better!”

• “Few take time to understand the process and how results are generated at different times of the year. If they had a better understanding they might be more willing to participate in a constructive way.”

Honig response: “NASS works hard to be transparent and provide details about our procedures. We make ourselves readily available to answer questions and address concerns.”

• “Of course, it’s not just the NASS estimates that create the distrust ... it’s the combination of the NASS estimate and the market reaction. So, the distrust is also toward ‘the markets.’ It’s the, ‘Let them figure it out on their own’ attitude. These are the same people that don’t want any crop estimates (private or public), will say ‘Let the market figure it out’ and then complain when the market doesn’t perform like they think it should.”

• “Conspiracy theorists are taking over ... due to social media. Media isn’t meant to be social. Keyboard warriors … everyone thinks they’re an expert. They hide behind cute screen names, but no recourse for putting out wild/false claims,” said one veteran industry analyst .

• “Going to be more important going forward! These new AI models scrape data and form conclusions. Without good data, the promise for AI may be limited, or even worse, misleading.”

Comments from Lance Honig, Director of Methodology Division and Chair, Agricultural Statistics Board of USDA’s NASS:

“As a Federal statistical agency, NASS has the unique ability to level the playing field by providing unbiased and accurate information to everyone involved in agriculture — free of charge and available to everyone at the same time. The work that we do is a partnership with farmers across the Nation. Every producer who receives a NASS survey has an opportunity to improve the accuracy of the results by completing it, which leads to better decisions, better policy, and increased market efficiency. That’s a win for everyone. Response to surveys has declined in recent years, but overall rates remain very strong at NASS relative to other organizations and entities conducting survey work — a tribute to the time farmers commit to this partnership. While surveys remain the backbone of our estimates, we incorporate additional information into our process, including administrative data from across USDA, geospatial information, and more. This helps to improve accuracy while reducing the volume of survey contacts we have to make, therefore reducing the burden placed on farmers. We continue to explore additional data sources as we look to the future, but remain committed to utilizing the most reliable information available today.”

Comments from USDA top economist Dr. Seth Meyer:

“There is talk about crop insurance and use of other data sources. For RMA data, the issue is timeliness and when producers are required to report information to AIPs. By that point it has very little additive value. (Note: USDA’s Honig also commented on this as noted above.) NASS also makes extensive use of FSA data; they can pull what they need, and NASS has moved up when it more fully utilizes the FSA data as the FSA data have both improved quality and timeliness. I expect we will see more of this, and it will support crop production estimates. They will use any bit of data they think can contribute to an improved estimate.

“Indeed, earth observation (EO) data and analysis are improving. 20 years ago, EO often overpromised what it can do, but the reality is starting to meet the hype. We use EO extensively in the WASDE report, in particular this is helpful in countries which lack a strong statistical service or where data collection are challenging. However, I’m not yet willing to trade my NASS data for it and I’m going to want a couple of decades of overlapping data before I’d agree.

“Often when I’m overseas, people I meet report that they rely on USDA data more than their own government’s data. There is a level of trust that the data are unbiased, and we need to work to maintain that trust among our direct constituents in the U.S. I think important points are raised [in this report] about how to ensure that the quality of that data is maintained.

“I always try to explain to producers why responding [to surveys] is in their best interest. They might not always like the way prices move when the report is released (at least not half the time) but these reports level the playing field every 30 days. They are at a disadvantage to large grain traders able to accumulate more information; NASS reports resolve some of this information asymmetry each month.

“There is a lot of value in NASS reports, value that isn’t as flashy as a new program or initiative but lays the foundation for a lot of decision making across the country by producers and others. I think it is always important for us at USDA to make the case, and I think it is a good case, that these reports are a benefit to the sector and not only help market function but result in better policy formation in DC and in the state capitals.”

Comments from former top USDA economist Dr. Joe Glauber:

“Earth observation data and AI technologies are becoming increasingly accurate at measuring area and predicting yields. While we still ground truth a lot of those data against NASS surveys, those methodologies will become increasingly prevalent and may ultimately become the gold standard. Earth observation technologies are already the standard for evaluating crop conditions in many countries (for example, GEOGLAM’s estimation of cropland and crop conditions in occupied areas of Ukraine). But moving beyond area, yield and production, it gets more difficult. NASS is one of the few national statistical agencies that attempts to measure grain stocks. Consumption estimates are even more difficult (There is a reason the WASDE corn balance sheet includes “Feed AND RESIDUAL.”) Lastly, NASS and ERS have provided long time series on farm sector well-being and as much as I am often critical of the farm income measure, my criticism is more about how the measure is (mis)interpreted.

“USDA’s original function was providing research and development for farmers (through seed development and distribution) and providing information on prices, production, etc. These remain public goods that I would argue are still relevant today as they were in the 1860s.”

Tomorrow's Top Producer Winner Joanna Carraway

Fri, 19 Jan 2024 20:43:50 GMT

A young Kentucky farmer thrives amidst adversity

Joanna Carraway is goal-oriented. Not a bucket-list, dreams-of-the-day type of goal setter; Carraway sets goals she will accomplish.

Carraway has lifetime goals, yearly goals and short-term goals. “Joanna will even set daily goals,” says her husband, Craig. “It drives me crazy.”

Carraway was combining a corn field on their western Kentucky farm not long ago. They moved fields late enough they should have parked the equipment and went home. “I was determined to finish it,” she says. Her father-in-law, Steve, calls her at 10:30 p.m. and says, “So, I guess you’re going to finish this field?” She says: “Yep, you all go home.”

A few hours later, that field was checked off her list, and she went home. Goal accomplished. “That is just the way my brain is wired,” says the 35-year-old farmer. Carraway’s driven personality and analytical nature is what has helped her family’s Murray, Ky., crop operation thrive during adverse conditions.

Every corner of farm country has its own unique challenges. For the Carraways, the biggest challenge has been no rain. In 2006, the couple bought into his family’s farm, which includes a partnership with Craig’s parents, Steve and Freda.

They had a banner year growing white and yellow corn, soybeans, winter wheat and tobacco. It was so encouraging that Carraway left her job at a software development company to join the farm full-time. Craig had left his ag retail sales job in 2003.

In 2007, it quit raining, and has hardly rained since. Corn yields on Carraway Family Farms have come in under 100 bu. per acre five of the last seven years due to drought. In 2012, corn only made 31 bu. per acre.

Carraway says nothing teaches you to manage money better than not having any. In 2007 they were facing a trying financial situation. Carraway knew it was time to nitpick their financials and business plans and make some management changes.

(Farm Journal)

For the past decade nearly the exact same group of men has been working for the Carraways.

Craig’s family had always bought crop insurance, but hadn’t had a crop insurance claim for years, Carraway says. “Then we came back to the farm and it quit raining.”

Necessary Changes. Due to consecutive years of low yields, Carraway knew she had to ramp up her understanding of crop insurance. “It took me a week, but I studied everything I could find about crop insurance,” she says. “I set up a spreadsheet that I could plug in the bushels we would potentially make, with a price, so I knew exactly what the crop insurance would pay.”

Jody Jones, a River Valley Ag Credit loan officer, handles the Carraway’s crop insurance. “I had seen Joanna work hard in the field, but little did I know how smart she was when it came to the business side of agriculture,” he notes. Jones says Joanna will often tell the crop insurance adjusters and him the crop insurance claim amount before it is even worked.

Her knowledge of crop insurance has proved to be financially valuable. Twice, their crop insurance checks were significantly less than what she had determined. By having her spreadsheet to show as proof, they were able to have the claims corrected.

Having a good team of advisers and partners, such as Jones, has been vital to the Carraways operation.

After a tough 2007, they decided to add more tobacco acres because it was the highest value crop on their farm. To do so, they needed to set up irrigation and build additional tobacco barns, which had a hefty price tag.

“The bank we were with at the time told us we couldn’t add any more debt,” Carraway says. “I showed them on paper how the expansion was going to add a huge amount to our farm income and be the safety net we needed, but they still said no. So I went bank shopping.”

With a little extra effort they were able to find a bank willing to take a chance. “We were really fortunate to find Heritage Bank,” Carraway says. “They believed we had a good plan and were a good idea; while on paper, we did not look like a good idea.”

Jimmy Hicks, Heritage Bank market president, has worked with the Carraways since 2008. “During this time, they have demonstrated excellent character and communication, and maintained a spotless credit rating,” Hicks says, noting that their substantial financial growth is a tribute to their production and financial management skills.

Carraway is quick to credit Hicks and the bank. “He allows us the flexibility to run our business and looks at the big picture,” she says. “Plus, he doesn’t point out our mistakes.”

Carraway’s main responsibilities on the farm include record keeping, setting financial goals and analyzing new purchases or expansions.

Her goal is to “recycle” money. “When we spend money, I always want it to stay in the same balance sheet,” Carraway says. “I don’t want to spend money that won’t be positively reflected on the balance sheet.”

A recent example is the purchase of a larger spray coupe. “Joanna did the math and determined it was a better investment to buy a bigger sprayer instead of hiring guys from the local coop to help spray,” Craig says. “That has been a great investment.”

Machinery costs are an area the Carraways focus on. “We can’t afford to have broken-down machinery for very long,” Carraway says, explaining that they buy extended warranties, typically three years, on key equipment. Even on new machinery, a small problem can quickly surpass the cost of the warranty. “We know for the three years we’re going to have this machine what it will cost us,” she says. “There are no surprises, which means we can run at full efficiency.”

Relationship Management. For more than a decade, 12 men from Mexico traveled north to spend six months on the Carraway Family Farm. The Carraways pay for H-2A visas, which allow temporary agricultural workers to seek employment in the U.S. Expenses for traveling to and from Kentucky, as well as housing, transportation and wages while in Kentucky, are paid by the Carraways.

Their main responsibilities are tobacco related, Craig says, and the program is expensive, but they wouldn’t be able to produce tobacco without them. “If you’re going to raise tobacco of any magnitude, you depend on migrant workers.”

What’s impressive is for the past decade nearly the exact same group of men has been working for the Carraways. “They are like family to us,” Carraway says. Through Facebook, she has connected with her employees’ families and posts updates and photos of what’s going on around the farm.

Carraway understands the sacrifice their employees make. “They are here trying to make a better life for their kids,” she says. “My goal is to set something up, like a retirement plan, for them. Tobacco is such hard work and they can’t do it forever. They have been so good to us, that I want to do something long-term for them. Ultimately, we need to grow and expand, but we want them to have something for later.”

The Carraways also maintain landlord relationships. They rent around 2,450 acres and have 50 landlords. Craig says these relationships have always been important. His grandfather started a tradition of providing sweet corn to landlords, then his father added sausage.

Now, Carraway has taken it a step further. Each year, she mails a card that features a snapshot of the farm. They also send notepads, hats and pens with the farm logo to help solidify their relationship.

These acts of kindness can lead to opportunities. Their goal is to fine-tune their finances so if a landlord wants to sell them his or her farm, they will be in a position to buy.

At the Heart. Originally a Missouri farm girl, Carraway grew up the youngest of five girls on a row-crop farm. Her father never hired employees, so his daughters became expert truck and tractor drivers at an early age. By age 10, Carraway was working 14-hour days. “My dad never asked if we could do something, he just told us to do it,” she says.

Carraway left the farm for Murray State University and majored in business administration. After six months, she missed agriculture; it was in her blood. She switched her major to agronomy and started an internship at a local ag retail store, where she met Craig.

As the daughter-in-law in a multi-generational operation, she admits it can be challenging, but with her farm family background Carraway understands the emotional connection families have with the land and their property.

Craig’s family wants the farm to succeed and stay intact, she says, and they try to balance that with her own goals and dreams for the farm. “It isn’t like I just married a farmer,” Carraway says. “This was my dream before I met him. We just happened to have the same dream.”

A Profile of Carraway Family Farms

(Farm Journal)

Joanna and Craig Carraway focus on relationships with their advisers, landlords and workers.

Long Line of Farming: Carraway Family Farms began in 1953, when Noby Carraway bought land near Murray, Ky. He and his wife, Euva, farmed until their son, Steve and his wife, Freda, joined the operation in 1971. After Noby passed away, and in 2006 Joanna and Craig began a five-year process of purchasing Euva’s share. Joanna and Craig have two children, Preston, 7, and Hannah, 2.

Crop Mix: The Carraways own 42 acres and rent 2,450. Around 80 acres are planted in tobacco and the remaining acres are used to produce white corn, yellow corn, soybeans and double-crop winter wheat.

Employee Management: Carraway Family Farms employs 12 migrant workers each year, whose main duty is to help with tobacco production. Joanna has connected with the workers’ families through social media, which helps them stay in touch during their six months apart.

Community Focused: Joanna says she never realized she would need to be an advocate for agriculture, but as fewer people have a direct connection to farming, she recognizes the need. In 2012, Carraway Family Farms donated funds for the local elementary school to build an outdoor classroom and garden. “It’s important for children to learn how food is grown,” she says. “It’s just one little garden at one little school, but it could make a difference.”

....................................

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Is Trouble Brewing for the Farm Economy?

Mon, 24 Jul 2023 20:05:15 GMT

For the first time since September 2020, the rural economy is showing signs of weakness. That’s according to the March Rural Mainstreet Index (RMI) from Creighton University.

For June 2022, the RMI sits at 49.8. That is down from May’s 57.7. The index ranges between 0 and 100 with a reading of 50 representing growth neutral and is generated by a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

“Much like the nation, the growth in the Rural Mainstreet economy is slowing,” says Ernie Goss, who chairs Creighton’s Heider College of Business and leads the RMI. “Supply chain disruptions from transportation bottlenecks and labor shortages continue to constrain growth. Farmers and bankers are bracing for escalating interest rates — both long-term and short-term.”

Bankers were asked their U.S. recession expectations for the next 12 months. Approximately 92.9% rate the likelihood of a U.S. recession above 50%. Only 7% rated a recession probability below 50%.

“Fuel prices are starting to have a severe negative impact on rural Nebraska,” shared Jon Schmaderer, CEO of Tri-County Bank in Stuart, Neb.

Farmland Prices Stay Strong

The region’s farmland price index for June hit 76.8, up from May’s 72. That marks the 21st straight month the index has moved above growth neutral. Over the past several months, the RMI has registered the most consistent and strongest growth in farmland prices since the survey was launched in 2006.

So far in June, Peoples Company appraisal team tracked 32 cropland auctions across 17 Iowa counties. In total, 4,305 acres of cropland sold in auctions for $57.8 million, or an average of $13,426 per acre.

In late May, a farm in Plymouth County, Iowa, sold for $25,000 per acre – a new record .

On average in June, bank CEOs expect 2022 net farm income for grain farmers to be 12.6% above 2021 levels.

The June farm equipment-sales index climbed to 71.4 from May’s healthy 66.9. This was the 19th straight month that the index has advanced above growth neutral. Readings over the past several months are the strongest string of monthly readings recorded since the beginning of the survey in 2006.

Meanwhile, the loan volume at rural banks is increasing. The June loan volume index rose to 78.5, its highest reading since May 2019, from last month’s 73.0.

“Escalating costs of farm inputs pushed borrowing up to its highest reading since May 2019,” Goss says.

Surging energy prices and rocketing agriculture input prices constrained the business confidence index to 33.9, its lowest level since May 2020. This marks the lowest back-to-back readings since the beginning of the pandemic in April and May 2020.

The RMI, which started in 2005, represents an early snapshot of the economy of rural agricultural and energy-dependent portions of the nation. It focuses on 200 rural communities with an average population of 1,300.

Banker Confidence in the Rural Economy Drops to Two-Year Low

Mon, 24 Jul 2023 15:40:22 GMT

For the sixth time in the past seven months, the rural economy has posted signs of weakness. That’s according to the Rural Mainstreet Index (RMI) from Creighton University.

For October 2022, the RMI sits at 44.2. That is down from September’s 46.3. This was the fifth consecutive month the overall reading has fallen below growth neutral.

“The Rural Mainstreet economy is now experiencing a downturn in economic activity,” says Ernie Goss, who chairs Creighton’s Heider College of Business and leads the RMI. “Almost one in four bankers reported the economy was already in a recession. Approximately, three of four bankers expect a recession to begin in 2023.”

The slowing economy, strong energy prices, higher borrowing costs and elevated agriculture input costs pushed the business confidence index down to 30.8 from 40.7 in September.

“This is the lowest reading for the confidence index since May 2020,” Goss says.

This month, bankers were asked to estimate the increase in farm equity for 2022. On average, bankers forecast a 3.4% boost in farm equity from 2021 levels. This compares to a 4% projection from the USDA for the nation’s farmers.

“Higher farm input costs and drought conditions in portions of the region supported stronger borrowing from farmers,” Goss says.

Farmland Still Shows Strength
The region’s farmland price index for October declined to 58 from September’s 61.1. However, the index has remained above growth neutral for the 25th straight month.

Jim Rothermich of the Land Talker reported on farmland sales auctions in Iowa between Oct. 8-14: “Plymouth County takes top honors this week with a sale at $26,250 per acre (55.6 acres), breaking the last state record of $26,000 per acre set in Sioux County on Aug. 31, 2022.”

For the second time in the past three months, the farm equipment-sales index slumped below growth neutral to 47.8 from September’s 58. The index has risen above growth neutral for 21 of the last 23 months.

How to know when agriculture is in a recession

Fri, 06 Sep 2024 17:18:49 GMT

Agriculture can sometimes act as a buffer during broader economic recessions, as demand for essential food items tends to remain relatively stable. However, when multiple indicators align, it can signal a recession in the agricultural sector.

According to analysts and economists, pay particular attention to the following:

Declining farm income. A significant drop in net farm income is a major sign. For example, USDA forecasts another major decline in farm income for 2024, on top of the big decline in 2023. That would be the largest ever two-year decline.
Sharply declining commodity prices. Weak prices for major crops and livestock products can indicate economic trouble for farmers. Crop prices have seen sharply declining prices, with the meat sector showing continued strength.
Elevated input prices costs. When input costs such as fertilizer, fuel and labor remain elevated while commodity prices fall, it squeezes farm profitability.
Reduced agricultural exports. Slowing exports and a growing trade deficit in agriculture can signal economic challenges. USDA forecasts the third straight year of a U.S. ag trade deficit , with the fiscal year 2025 at $42.5 billion.
Debt vs. cash flow. Increasing farm debt relative to cash flow combined with higher borrowing costs due to interest rate increases can strain farm finances.
Weakening credit conditions. Lower repayment rates on farm loans and increased loan renewals/extensions can indicate financial stress.
Declining demand for agricultural products. Reduced consumer spending on discretionary food items during broader economic recessions can impact certain agricultural sectors.
Falling farmland values. Higher interest rates and lower farm profitability can lead to downward pressure on land prices .
Increased inventory levels. Growing stockpiles of crops and livestock products can spur further price declines.
Widespread financial stress. When a large number of farmers across different regions and commodity sectors experience financial difficulties simultaneously it can point to an industry-wide recession.

Changes in U.S.-Mexican Cattle and Beef Trade

Fri, 20 Nov 2020 05:36:55 GMT

—Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

Mexico has long been a major beef industry trading partner with the U.S. in roles that have continually evolved into deeper and more integrated relationships. For many years, Mexico has been the major source of imported feeder cattle. U.S. beef exports to Mexico developed in the late 1990s and Mexico has been one of the top beef export destinations since then.

Most recently Mexico has emerged as a top source of beef imports into the U.S. All of these markets have been rather dynamic in recent years and raise the question of what the nature of U.S. and Mexican cattle and beef trade will be in the future.

Since 2009, U.S. imports of Mexican beef increased by 268% to make Mexico the fourth largest source of U.S. beef imports. Mexico exports beef to a number of countries including Japan, Russia and South Korea and Mexican beef exports have more than doubled since 2009. Beef exports to the U.S. represented just over 40% of total Mexican beef exports in 2012.

U.S. imports of Mexican beef are up again so far in 2013 and are on pace to increase another 30% by the end of the year. Most of the beef imported from Mexico is middle meats from fed cattle.

The dramatic increase in Mexican beef exports is the result of a rapid conversion of the Mexican beef industry from a carcass to a boxed beef marketing system. This has opened new market opportunities in both domestic and international beef markets. It is not clear how potentially large the market for Mexican beef in the U.S. is, but there appears to be room for additional growth.

U.S. exports of beef to Mexico have declined since 2008 and are declining again in 2013. Since 2008, a combination of higher U.S. beef prices and exchange rate impacts have made U.S. beef more expensive in Mexico and are undoubtedly the major reason for declining beef exports to Mexico. However, Mexican beef prices have risen sharply in the past 18 months and domestic beef prices in Mexico are once again close to U.S. beef prices. This may help stabilize U.S. beef exports to Mexico in the second half of the year. However, high beef prices in Mexico is curtailing consumption and it is hard to anticipate much increase in beef imports from the U.S. with both domestic and imported beef in Mexico at record price levels. U.S beef exports to Mexico are likely to level off and could recover some of the recent declines in the face of expected decreased domestic beef production in Mexico in the next couple of years.

High U.S. cattle prices and drought in Mexico resulted in large and growing U.S. imports of Mexican cattle since 2010. The 2012 total of 1.47 million head was the second largest level of Mexican cattle imports since the 1995 record level of 1.65 million head.

Cattle imports from Mexico in 2012 included the largest number of spayed heifers ever imported while the number of steers actually decreased from 2011 totals. It is apparent that recent levels of cattle exports from Mexico are not sustainable and represent herd liquidation. The rate of cattle imports into the U.S. dropped sharply in late 2012 and so far in 2013.

Total imports of Mexican cattle into the U.S. in 2013 are on pace to decrease by more than 40 percent and may drop even more. Total imports of less than 800,000 head are likely for the year. Mexican herd liquidation in recent years likely means diminished beef production in Mexico and diminished levels of cattle exports to the U.S. for several years.

Business Management: Charts Ease Decisions

Fri, 13 Nov 2020 05:58:48 GMT

Commodities and diversity provide security for Nebraska family farm

Eyes glued to the computer screen, with a 15-year file of February market moves and a phone that rings every five minutes, Harry Knobbe of West Point, Neb., is like a kid in a candy shop. “It’s exciting,” he says. “You have to be prepared to make quick decisions, but control your emotions.”

Knobbe, who started farming in 1960 with a vision of 160 acres and a few head of cattle, says the same ability to make fast decisions while keeping a level head and emotions in check can be applied to farming, and he looks for it in his employees, regardless of their role.

“I’ve always got my eye out for opportunities. Not everyone can win. You have to try to outmaneuver others.”

Today, Knobbe farms and owns Harry Knobbe Feedyards, Livestock Sales & Commodities, Inc., in Cuming County, which is 24 miles by 24 miles with a population of 9,500 people and 330,000 cattle on feed any given day. With customers in 25 states from Virginia to Montana to Utah, Knobbe has earned the respect of farmers and ranchers across the country, marketing 720,000 cattle a year.

Though agriculture has become increasingly volatile during the last decade and risk management has never been more critical to farm and ranch sustainability, Knobbe says farmers are lucky. “What other industry has the ability to lock in prices?” he asks. “The automotive business is completely dependent on consumer spending, which fluctuates. The construction industry is dependent on the economy, with little to no ability to control its future from year to year.”

Knobbe is diversified within and outside of the cattle industry and says he is in a comfort zone. “I’ve got commodity markets to deal with my risk and can hedge, set a floor and forward-sell.” Admitting that it took him about 20 years to figure the markets out, Knobbe relies heavily on history and charts, as well as his employees. Two walls of a makeshift classroom in the basement of his office are covered with cattle market charts dating back to 1967 and have been marked every week since.

Student Turned Teacher. Knobbe, a student of the commodity markets, takes advantage of professional development opportunities and networking, and gets involved in organizations and boards at the local, state and national levels.

“I’ve always got my eyes open, looking for opportunities,” says Knobbe, who partnered with four others in West Point, Neb., to open a hotel and provide visitors with an alternative to Super 8. “Not everyone can win. You have to try to outmaneuver others.”

He explains that the market has made a lot of $18 moves during the past 30 years. In 2011, fat cattle went from $126 to $108. In 2012, they went from $129 to $111. This is good, Knobbe says. “You can’t make money on a sideways market,” he notes, acknowledging that some disagree with his philosophy.

Knobbe continues to learn, but now his focus is on helping others excel. He opens the doors of his business to local high schools, allowing them to come in and learn about commodities and marketing, while exposing them to different agricultural professions.

Knobbe advised a class of students to be curious and ask questions. “Get involved in extracurricular activities, work in the field and do some research on the job or career you’re interested in,” he said. “I will hire someone who has had internships and experience compared to someone who hasn’t, even if they both have the same degree and interview well. It tells me you take initiative.”

Marketing more than 720,000 cattle a year, Harry Knobbe helps other farmers make profitable moves.

Knobbe also uses his charts and classroom to teach customers market fundamentals. “It’s a perfect tool to show that the old highs are today’s lows and how outside events affect the markets,” he says. “The market is always questioning what price is too high and what price is too low.” His rule of thumb: when the market gains a pencil length above or below the red line, get ready for earns and churns.

“I have farmers who call me and ask if we are close to being a pencil length,” Knobbe says.

Lessons aren’t just related to the markets or the cattle industry. Knobbe has given presentations about employee management and properly on-boarding new hires.

Knobbe knows that his business is only as strong as his employees and puts a great deal of thought and energy into helping them excel. “Let people make decisions and give them responsibility; they’ll be better employees,” he says, noting that it seems simple. “Too many people don’t do this and they just give jobs or micromanage, which does not engage or give a sense of ownership to the employee. For example, I have a phone issue. If I hadn’t given an employee the responsibility to order and set up the phones years ago, this would be my problem. As it is, I don’t have to worry about it; I know it will be handled.”

Knobbe says to think of it like a draft horse. “A draft horse likes to work; it wants to be useful,” he notes. “A person on the street might see that horse sweating and be sympathetic, but that horse wants to work. It also expects a bucket of oats at the end of the day.”

Don’t forget to pay people and reward them for the value they bring to your business, he emphasizes. It’s important to get to know your employees and what motivates them. Knobbe pays his employees an extra $100 a month just for being on time every day. “Guess what?” he asks. “No one is late to work, which means we get more done.”

Knobbe believes that he gets more today out of giving. “We make a living by what we make, but we make a life by what we give.”

Knobbe Knowledge

To many in the cattle industry, Harry Knobbe, farmer and owner of the Nebraska-based Harry Knobbe Feedyards, Livestock Sales & Commodities, Inc., is a walking book with a wealth of knowledge about the cattle industry, markets and business practices. Here are a few snippets:

Get involved. You only get out what you put in. “You have to show up at church on Sunday for your business.”
Put your time and effort where there’s money to be made. “If it’s not going to make you money, don’t do it. I don’t read my e-mail—only what needs attention.” Prioritize.
Grow slowly and live modestly. “If you can anticipate the next move and make a little money each time, you’ll be ahead at the end.”
Write down and know the names of your contacts’ spouses and family members—whether it’s a customer, landlord or potential client. “Get to know those who influence and can make a difference in the future.”
Take time to get to know your employees and what motivates them. “You can get really creative with what you offer—it doesn’t have to be monetary.”
Before making a big purchase or big sell, write down the advantages and disadvantages of making that move. “It’s much easier to make a decision if you have the pros and cons side-by-side.”

Bump Employee Bonuses

Fri, 23 Sep 2022 21:30:59 GMT

A long-term incentive plan drives success

Most farmers think about employee bonuses only at the end of the year, but experts recommend considering an incentive program that drives results throughout the year.

“It’s in the farmer’s best interest to align employee goals with that of the farm. Consider how much more of an effort will be made if employees know they are close to meeting their goal.”

Bonuses are good, but they can have unintended consequences, says Raquel Lacey Nelson, a senior associate with The Context Network, an agricultural business management consulting firm. “It can be hard to manage employee expectations if bonuses vary. Even then, employees don’t associate the bonus with their day-to-day actions.”

Incentive programs clearly communicate the goals of the farm and of the position, while motivating employee performance. “This requires farmers to be proactive and purposeful,” Nelson says. “You have to think a year or two in advance.”

The need to formalize policies and procedures increases as a business moves from sole proprietorship to a partnership and more people get involved, explains Barb Dartt, a partner at GROW: The Family Business Advisors. “Everyone comes to the table with different perspectives and values, which can be invaluable to a business as long as they all have the same end result in mind,” she says.

Three Plans. Creating a long-term incentive plan can be intimidating. Nelson helps lay the groundwork. Employee incentive programs need to be tied to specific goals that drive specific behaviors, which can be set for an individual, team or division.

The four kinds of plan are: farmbased incentives, team-based incentives, individual incentives and spot cash awards. Farm-based incentives are best when an individual can clearly tie their contributions to the larger operation. Team-based incentives fit best when units are more stand-alone than integrated and the environment is stable at the group level. Individual incentives are best when groups consist of individual contributors and expected results are clear and stable. Spot cash awards work when make-or-break projects are well defined; awards must be administered with utmost fairness.

Farmers should ask themselves: What do I want to achieve? How do I achieve and measure it? How do I communicate and monitor it?

“It’s in the farmer’s best interest to align employee goals with that of the farm,” Nelson says. “Then everyone is moving in the same direction. Consider how much more of an effort will be made if employees know they are close to meeting their goal.”

An incentive program’s success hinges on communication, Nelson says. As the employer, you must be able to say, “The performance of our business did not deliver the incentive opportunity we had expected.”

Dartt says an incentive program is not for everyone. “It requires a fair amount of management and communication, which means leadership needs to add that to their repertoire of skills. You can’t avoid conflict and difficult discussions; you must be able to discuss criticisms.”

Whether you decide to continue giving bonuses or switch to an incentive program, Dartt says, it’s important to get to know your employees and what motivates them. Get creative with time off, baby-sitting and child care, recognition, increased responsibility, professional development and continuing education.

13 States Launch New Legal Challenge to California Egg Law

Fri, 13 Nov 2020 06:04:58 GMT

JEFFERSON CITY, Mo. (AP) — More than a dozen states banded together Monday to ask the U.S. Supreme Court to block a California law requiring any eggs sold there to come from hens that have space to stretch out in their cages.

In a lawsuit filed directly to the high court, the states allege that California’s law has cost consumers nationwide up to $350 million annually because of higher egg prices since it took effect in 2015. The lawsuit argues that California’s requirements violate the U.S. Constitution’s interstate commerce clause and are pre-empted by federal law.

A federal appeals court panel rejected similar claims last year in a separate case brought by six states, ruling that they failed to show California’s law would affect more than just individual farmers. The latest lawsuit seeks to address that by citing an economic analysis of the California law. It also asks the Supreme Court to take up the case directly instead of requiring that it first move through the lower courts.

Missouri Attorney General Josh Hawley, a Republican who is running for U.S. Senate in 2018, is leading the lawsuit. Other plaintiff states are Alabama, Arkansas, Indiana, Iowa, Louisiana, Nebraska, Nevada, North Dakota, Oklahoma, Texas, Utah and Wisconsin. All have Republican attorneys general except Iowa, which has a Democrat.

The California attorney general’s office did not immediately respond to a request for comment Monday.

California produced about 5 billion eggs and imported an additional 4 billion from other states in 2012, according to the lawsuit. Thirty percent of those out-of-state eggs came from Iowa, the nation’s top egg producer. About 13 percent of California’s egg imports came from Missouri, the second highest percentage cited in the lawsuit.

The number of eggs produced in California dropped to 3.5 billion last year despite rising nationally, according to the U.S. Department of Agriculture. Missouri’s egg production was up 60 percent since 2012 to 3.2 billion last year.

Hawley asserted in a statement that California’s egg law is “a clear attempt by big-government proponents to impose job-killing regulations” on other states.

California voters approved a ballot initiative in 2008 that requires that hens in cages spend most of their day in spaces large enough that they can lie down, stand up, turn around and fully extend their limbs. The measure gave farmers until 2015 to comply.

After California egg farmers raised concerns that they would be put a competitive disadvantage with those elsewhere, state legislators in 2010 expanded the law to bar the sale of eggs from any hens that weren’t raised in compliance with California’s standards requiring at least 116 square inches of floor space per chicken. The industry standard had been 67 square inches.

The California law cites concerns about protecting people from salmonella and other illnesses. But the suing states say such health concerns are unmerited and merely a pretext for protecting California’s agriculture industry.

The lawsuit cites a study from a University of Missouri economist who concluded that the national price of a dozen eggs has increased between 1.8 percent and 5.1 percent since January 2015 because of the California cage requirements. The study said the price increase has added thousands of dollars annually to states’ costs for supplying eggs to prisoners.

The study also estimated that California’s egg regulations have cost U.S. households up to $350 million annually, including about $97 million for those whose incomes are in the lowest one-fifth nationally.

Copyright 2017, The Associated Press

China Has Its Own Apple Launch That's Nothing to Do With IPhones

Fri, 13 Nov 2020 06:04:42 GMT

(Bloomberg) -- They won’t be lining up round the block to get their hands on them, but there’ll no doubt be some buyers keen to snap up China’s new apple futures contracts.

The Zhengzhou Commodity Exchange will list Fuji apple futures on Friday, adding to contracts it already offers including wheat and white sugar, meaning investors could pretty much hedge all the key ingredients of an apple pie. They’ll start trading at 7,800 yuan ($1,184) a metric ton.

The apple contracts will be for delivery in May, July, October, November and December and trading will run from 9 a.m. to 11:30 a.m. and 1:30 p.m. to 3 p.m. local time. Fruit will be 80 millimeters (3.1 inches) or more in diameter, with a 2,000 yuan per ton discount for apples between 75 millimeters and 79 millimeters. China has fresh apple storage capacity of 10 million tons, or about 25 percent of production, according to the Zhengzhou Commodity Exchange.

Apples are the most popular fruit in China and the country is the world’s biggest producer, accounting for more than half of global output. Chinese exchanges this year started options for soybean meal and white sugar and authorities have said they’re studying futures including ginger, hogs and potatoes. Until one of them launches milk futures though, you won’t be able to hedge your custard.

©2017 Bloomberg L.P.

Thanksgiving Staple Dish Heads for Compost Heap?

Fri, 13 Nov 2020 06:04:54 GMT

Cranberries might be a staple on Thanksgiving tables, but a glut of U.S. supplies has gotten so large that fruit could be headed to the compost pile.

Just as demand is hitting its seasonal peak, American processors are anxiously awaiting government approval that would allow them to turn excess fruit into fertilizer. The program would be the first of its kind for cranberries.
Supplies have piled up amid bountiful U.S. harvests and a surge in imports. Inventories were large enough to top consumption before farmers even started gathering this year’s crop in September. The overhang prompted growers and processors to vote in favor of the disposal program at a biannual meeting of the Cranberry Marketing Committee in August. The U.S. Department of Agriculture could rubber-stamp the proposal as early as this week.

“The order will allow the industry to get back into supply and demand balance,” said Kellyanne Dignan, the director of global cooperative communications at Ocean Spray Cranberries Inc., the largest U.S. producer and processor, and a name that’s become almost synonymous with the fruit.

The humble cranberry is iconic at this time of year as it pops up in everything from traditional relishes to Christmas cookies and cocktails. About 20 percent of annual sales of the fresh and processed fruit occurs during the week of Thanksgiving, celebrated on Nov. 23 this year. But becoming a celebrity of the fruit world hasn’t been enough to reverse the slowing pace of demand growth, leading the industry to take desperate measures to keep prices from collapsing.

Under the proposed initiative, fruit processors and exporters would be responsible for supply disposal. Some can be donated or used for research, but the lion’s share will likely end up as compost. The cranberry committee has also recommended that growers reduce next year’s production, leaving it 25 percent below average sales of the past six years, according to Michelle Hogan, executive director of the Wareham, Massachusetts-based group. The plan for next season is similar to a crop-reduction method last used in 2000 and 2001.

“We are producing a lot more than we are selling” Hogan said.

The cranberry is one of many agricultural products that are plagued by gluts, which has kept global food inflation in check. World grain stockpiles are ballooning and American meat production is at record levels. All the excess supply will help make this year’s U.S. Thanksgiving dinner the cheapest since 2013.

The disposal program would help to reverse the growth of excess supply while the industry works to increase demand in domestic and international markets, said Tom Lochner, executive director of the Wisconsin State Cranberry Growers Association . About 5 percent of the crop is sold as fresh fruit, with the rest stored and sold frozen, dried or processed into juices and sauces.

If the USDA approves the program, any handler that uses more than 125,000 barrels would be required to dispose of 15 percent of their supplies gathered from this year’s crop, Hogan of the Cranberry Marketing Committee said. A barrel weighs 100 pounds, or 45 kilograms.

U.S. Crop

A bout of bad weather could also help to ease the fruit glut. American production is projected to fall 6 percent this year to 5.6 million barrels after some adverse growing conditions, the government estimates.

Cranberries are native to North America with about 75 percent of global production grown in the U.S. Wisconsin accounts for more than half the domestic harvest.

Copyright 2017, Bloomberg News

Farm Economy

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