Low commodity prices, tightening credit, expensive land and rising costs for expenses such as seed and fertilizer will lead to financial losses for many farmers and ranchers this year, Illinois Farm Bureau President Richard Guebert, Jr. told a House subcommittee today.
Testifying on behalf of the American Farm Bureau Federation and the Illinois Farm Bureau, Guebert encouraged Congress to help farm and ranch families endure what observers agree will be a difficult year. He said Illinois farmers who produce row crops have been hit hard along with the rest of the farm economy.
"Over the last 18 months we have seen our working capital erode over 25 percent," Guebert said. "Our equity is fading into the sunset. Indexed to inflation, the economic return for Illinois farmers after accounting for family expenses is currently at its lowest level since 1972. All of this has proven to be a very steep learning curve for a new generation of younger and less experienced farmers who entered the business when times were better."
The emergence of global food markets in recent years has made already volatile commodity markets even less stable than before.
"Commodity prices used to be more predictable," Guebert said. "They were primarily influenced by regional and national factors. Just in the past two weeks we've seen a $1.30 a bushel increase in soybean prices because of rain during harvest in Brazil, and then overnight on April 22 a drop of 22 cents a bushel. Farmers and ranchers are price takers, whether on the input or commodity side of the equation."
Many government programs have helped farm families, but others have hindered the wellbeing of those who raise the food, fuel and fiber Americans depend on every day, Guebert said.
On the positive side:
- Congressional agriculture leaders have protected the farm bill's safety net and risk management tools to help farmers and ranchers cope with market volatility.
- Congress has bolstered the farm economy by supporting significant transportation projects to improve major waterways and make driver licensing more practical and easier to comply with.
- The Environmental Protection Agency has taken a flexible approach on licensing dicamba herbicide formulations.
- The President's Task Force on Pollinators has recognized that beekeepers and farmers need one another and allowed them to work together to preserve pollinators rather than imposing a solution from the outside.
Unfortunately, not all government actions have been so benign:
- Proponents of mandatory labeling for products that include genetically modified ingredients have pushed their anti-science agenda in Congress to the detriment of farmers and consumers alike.
- The nation's H-2A visa program for agricultural workers remains inefficient and impractical for most farmers.
- Compliance with the Affordable Care Act remains confusing and difficult for small seasonal employers such as farmers and ranchers.
- EPA is increasingly restricting pesticides and herbicides without proper scientific evidence for its positions.
- The U.S. Forest Service recently proposed that ranchers surrender their water rights in exchange for the ability to graze on federal lands. The USFS later withdrew the proposal, but this remains a topic of discussion among environmental groups.
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