Q&A: Red Flags in Farm Economy

Q: What red flags are catching your attention in the U.S. farm economy?
A:As a lifelong family farmer, I understand Iowa farm families weather the storms of cyclical markets and natural disasters. Managing risk is central to the job. As harvest season gets into full swing, I’m keeping a close eye on dark clouds looming on the horizon, inching too close to home for tens of thousands of Iowa farmers. Roughly one-third of family farms was lost in the U.S. during the Farm Crisis in the 1980s, and hundreds of farmers took their own lives, overcome with the anguish of losing their livelihoods. The farm economy today has telltale warning signs of a brewing storm that could lead to financial devastation the likes of which we haven’t seen in four decades.
History tells us policymakers in Washington can’t afford to wait too long to avert catastrophic losses in the farm economy. We must heed the lessons from the 1980s. Back then, the farm economy buckled under soaring interest rates, too much debt, low commodity prices and the Soviet grain embargo. The ripple effect was widespread and reshaped the economy and population of rural communities throughout America’s Heartland. Let’s consider red flags signaling distress today in farm country: elevated borrowing costs to pay for rising cost of inputs, including fuel, fertilizer, seed and machinery; low grain prices and high production costs are pulling down farmland values; debt to income ratio is pressuring farm credit conditions and highlighting fragile decisions for lenders and borrowers; global trade uncertainty, particularly with China is hurting grain prices; and, supply chain disruptions are driving up cost for fertilizer. During my 99 county meetings, emails to my office and meetings I’ve had with farm groups, I’m getting a loud and clear message. There’s rising concern the farm economy is heading in the wrong direction. Recently,Farm Aid celebrated its 40thanniversaryand I applaud this organization for shining a spotlight on struggling farmers. As Iowa’s senior U.S. Senator, I’m working to ensure Congress and the White House don’t sit on the sidelines.
Q: How are you working to ease the situation facing farmers?
A:First of all, I’m turning up the volume in Washington to ensure our nation’s political leaders understand the gravity of the situation. Farmers make up only two percent of our population who feed the other 98 percent of Americans. Food security is national security. We can’t afford to let the farm economy collapse like it did in the 1980s. Iowa farmers are harvesting crops that today would sell below the cost of production. I’m working with members of the Senate Agriculture Committee and the Trump administration to shape an aid package that will help farmers stay afloat and make good on their loan payments to secure lines of credit for next year’s crop. But, farmers want markets to sell their commodities, not aid. I want to know whysoybean exports to Chinaweren’t part of recent negotiations at the U.S.-China trade meeting in Spain. America’s farmers already faced a steep trade deficit compounded by the Biden administration’s failure to pursue and expand trade agreements with our partners overseas. So, when the world’s largest soybean customer hasn’t purchased a single U.S. soybean during this crop year, the American farmer is in a world of hurt. The U.S. can’t afford to lose market share to other nations that we may never win back.American farmers need a trade deal with China now.
When I talk with farmers and ag lenders today, I’m hearing concerns reminiscent of the 1980s farm crisis. Some bankers are telling farmers they might need to sell off their land to pay their bills. Back then, thousands of farmers from across the country joined a convoy of tractors to the nation’s capital when I served in the U.S. House of Representatives. At that time, I met with many who shared their frustrations that depressed commodity prices weren’t covering the rising cost of production. We must learn from history and not let political gridlock today delay what’s urgently needed for America’s farmers. Keep in mind, improvements to thefarm safety netincluded in the recent tax law kick in next year.
As an outspokenchampion for renewable fuels, I’ll keep pushing to boost domestic markets, includingnationwide E15 sales; higherrenewable volume obligations (RVOs); and proper implementation of theClean Fuels Production Tax Credit. I’m also working to stabilize the fertilizer markets and push for price transparency to help drive down costs. My bipartisanFertilizer Research Actwould boost innovation and competition to improve productivity, soil health and crop yields on U.S. farms. I was among 68 senators signing abipartisan, bicameral letterurging U.S. Secretary of Interior Doug Burgum to add phosphate – a critical fertilizer ingredient – to the U.S. Critical Minerals List. This designation would lower input prices for farmers and steer phosphate production back to the United States. Earlier this year, I urged Secretary Burgum to reverse the Biden administration order thatremoved potashfrom this list. Phosphate and potash are indispensable to global food production and American agriculture. TheList of Critical Mineralsinforms investment, incentives and permitting processes designed to reduce U.S. dependence on foreign adversaries and disruptions to our supply chains. High fertilizer prices drive up the price of food and keep profitability out of reach for farmers.