Lower prices will affect income for all farmers and ranchers, but will have an even greater impact on new and young farmers who have not built up equity, are renting a significant portion of their land or are paying off equipment.
“The bottom line is that farmers and ranchers are being forced to tighten their belts and pay much closer attention to their financial situation,” Duvall told the House Subcommittee on General Farm Commodities and Risk Management. “They will be in greater need of safety net and risk management programs than has been the case for some time—for some, since they started farming.”
Duvall’s testimony included a long list of bad economic news:
- Cotton — 80 cents a pound just a few years ago — now brings prices in the 50-cent range.
- Milk that was selling for $20 or more per hundred pounds a couple years back now fetches $15 or $16.
- Net farm income, which includes other factors like depreciation, inventory change and other non-cash costs, declined from $123 billion in 2013 to $56 billion in 2015 and is estimated at $55 billion for 2016.
- Longer-term projections by the Agriculture Department leave net cash income averaging less than $80 billion for the coming decade and net farm income at less than $70 billion over the same period.
Bad news notwithstanding, the Farm Bureau president found hope on the horizon. Duvall told lawmakers there were numerous things they could do to help the farm economy, including:
- Approving the Trans-Pacific Partnership to raise overall farm income without adding to government spending;
- Stopping the Waters of the U.S. rule, which places additional costs and burdens on farming;
- Reversing spill prevention and control requirements that add costs without clear environmental benefit; and
- Establishing a nation-wide labeling standard for genetically modified food to avoid a patchwork of state laws.
Duvall’s testimony can be found here.