It’s a dire situation in farm country, according to Sen. John Boozman (R-Ark.), ranking member of the Senate Ag Committee. Just this week, he was on Capitol Hill urging legislators to help producers offset some of their losses with emergency relief.
“It’s clear the pain our farm families are living through,” Boozman said on the Senate floor. “For some producers, this is the second or third consecutive year of negative cash flow. This means many farm families are ending 2024 in the red, unable to pay off this year’s operating loan, unable to get the loan to farm in 2025 and facing the reality of being the generation to have lost the family farm due to extreme market conditions beyond their control.”
Lower commodity prices and increases in input costs are creating tight margins for row crop producers. Without a new farm bill this year, Boozman is exploring ways to provide 2024 economic assistance and certainty for 2025 through an improved farm safety net.
“We simply have to come up with a package that helps [farmers] get through this year,” Boozman said. “The last two years, as I mentioned earlier, were the worst ever as far as decrease in income. Going forward, if we don’t modernize the farm bill, if we don’t get risk management tools adjusted for inflation, then bankers aren’t going to have certainty [farmers’] risks are going to lessen, and it’s going to be difficult for a lot of farmers to get the financing they need.”
Whether it’s ag lenders, economists or farmers, Boozman said everyone is saying: It’s a dire picture in farm country and help is needed.
FARM Act
Another possible way for farmers to see some economic relief is through the Farm Assistance and Revenue Mitigation (FARM) Act. The bill was authored by Rep. Trent Kelly (R-Miss.) on the House Ag Committee. It would offer payment assistance to eligible farmers.
Congress is in session through Dec. 20, so Boozman and others are working diligently to secure enough support and votes to pass the FARM Act. While it’s unclear how Congress will push through the FARM Act, it’s likely going to be via the Continuing Resolution (CR).
“We’re working literally as we speak to get the language together and to get agreement from both sides of the aisle, Democrats and Republicans, to move forward,” Boozman said. “I can’t tell you for sure it’s going to get passed, but I understand how important it is as far as where it would be attached, which is probably to the continuing resolution.”
What payment might farmers receive through the FARM Act? According to one economist, the current payment calculation is: (USDA’s Projected Cost of the Crop – National Projected Returns) x Eligible Acres x 60% = Total Payment.
When you take into consideration the new WASDE prices and cost of production released each month, here’s how those payments could look per acre:
- Corn: $101
- Soybeans: $53
- Wheat: $73
- Cotton: $195
- Rice: $84
- Sorghum: $97
- Oats: $177
- Barley: $0
It’s important to note these payment estimates could change with the updated WASDE report next week. One economist told Farm Journal the 60% figure is a moving target that’s currently being debated on the Hill.
Steep Losses for 2024
The Senate Ag Committee recently released 2024 total farm income losses at $29.3 billion. At the top was corn, with losses of $11.59 billion, followed by soybeans and then wheat. However, almost every crop is facing steep financial challenges, including sorghum, oats, rice and peanuts.
Now the question is, will the proposed relief in the FARM Act be enough to help stop the bleeding on row crop farms? Boozman hopes so.
“I understand how difficult it is — and for ag, I can’t imagine not describing it as a recession. When you look at the numbers recorded by USDA, I think they’re actually undervalued. We simply have to come up with a package that helps [farmers] get through this year,” Boozman said. “It’s not only what economists are telling us, it’s not only farmers and landowners — it’s all lenders and everyone involved in agriculture painting a very dire picture.”
As farm-focused senators are working to get the FARM Act passed, Boozman said the proposed legislation is facing some unexpected challenges, specifically in regard to cost.
“It’s just going to cost some money to get it done, and we’re working really hard to explain the need for that,” he said. “I don’t know exactly what [the FARM Act] will look like in the end, but we’ve got a lot of good people working on it. Senator Hoeven is working really hard on the Senate side. A lot is going to go through the Appropriations Committee in the Senate, and I’m on that committee as well as several others. Cindy Hyde-Smith has been active, John Thune and all of the people on the ag committee have done a great job of trying to come up with a package that will be enough to make a real difference for people to get through this year.”
Looking Ahead
Boozman recently met with Brooke Rollins, president-elect Donald Trump’s pick for Secretary of Agriculture. It was his first meeting with her, and he said he was very pleased, saying: “She’s very close to the president, which is so important in these cabinet positions that she’s got his ear...I’m looking forward to getting her confirmed as quickly as possible and working with her in the future.”
What will Rollins’ priorities be if she’s confirmed once Trump is sworn into office? And will he support Robert F. Kennedy Jr’s nomination to head the Department of Health and Human Services? Watch the full conversation here.
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