(WASHINGTON D.C.) — The topic of the farm economy, access to ag lending, crop insurance and other issues in rural America continued to be a point of discussion on Capitol Hill this week.
The Senate Agriculture Committee hosted the third hearing in a series titled “Perspectives from the Field: Risk Management, Credit and Rural Business Views on the Agricultural Economy Part 3” on Tuesday afternoon. Senate Agriculture Committee Chairman John Boorman (R-AR) started the meeting with comments on the broader farm economy outlook saying that “if we expect current and future generations of producers to not only survive, but thrive, we need to pass a strong five-year Farm Bill this year that strengthens the farm safety net and revitalizes rural communities, many of of which are struggling to retain an adequate workforce to feed, fuel and clothe the next generation of Americans.”
Witnesses testified to a wide range of topics including lending, ag banking perspectives, the need for crop insurance and much more.
Tara Durbin, Chief Lending Officer for Agriculture with Farm Credit Mid-America, testified that margins are getting tighter for producers. “Excluding government payments, USDA’s inflation-adjusted net farm income has fallen by $43 billion,” said Durbin. “While some livestock producers have benefited from high cattle and milk prices, low prices for other ag products, coupled with high input costs are tightening margins and creating severe losses for many producers. Some geographic regions and some commodities are being more impacted than others. In some regions and for some producers, 2024 was the second or third consecutive year of loss. Unfortunately, the current economic environment is expected to continue in 2025. As working capital decreases, producers’ margin for error is also decreasing.”
Durbin also added that things are even tougher for young and beginning farmers saying “many of whom do not have significant equity built up from long-time land ownership. Many of these producers have few remaining options as they work to continue for another growing season. More experienced producers with equity built up also face difficult decisions about how much of their hard-earned equity to risk with little to no sign of profitability on the horizon.”
Sedrick Brown Jr., Farmer/Owner with Rowe Organic Farms in Albany, GA, is a first generation black farmer. He emphasized that disparity and challenges for young and beginning farmers to get financing. “Credit access is critical for young farmers to have land. Yet, finding and accessing affordable land is the number one challenge facing young farmers and ranchers in the United States, regardless of geography, number of years in agriculture, or whether or not they are first generation producers,” said Brown Jr. “With the average age of U.S. producers approaching 60 years old and nearly half of U.S. farmland expected to change hands over the next two decades, the next Farm Bill is our best chance at creating meaningful policy solutions to this daunting trend that keeps land out of reach for so many. If the next Farm Bill does not respond to these critical needs, not only is the success and economic security of young and beginning producers at risk, but so is the strength and security of our food and agricultural systems, and thus our national security.”
In follow-up questioning from Senator Mitch McConnell (R-KY), Durbin mentioned that incentivizing keeping agricultural land in production could be one way to make things more accessible for young and beginning farmers. Senator Tommy Tuberville (R-AL) asked the witnesses how we can bring young farmers into the current “fiasco” of an ag economy as he called it and how Congress can help in general. Many of the witnesses stressed the need to get the stability and certainty of a new five year Farm Bill would be one way to help.
Dalynn Hoch, EVP and Head of Rural Community Insurance Services (RCIS), highlighted the need for crop insurance to help support American farmers. “Today, crop insurance is an economic driver in rural America that helps maintain capital flow by not only in its most basic function of paying claims for farmers who suffer losses but also ensuring access to needed credit for operating loans,” said Hoch. “This mechanism not only secures loans and empowers the farmer to plant with necessary risk protection but also spills over into the local economy empowering agricultural retailers and other local businesses, often the first line of unsecured debt to the farmer in communities across the country. Additionally, crop insurance spurs job creation by providing many head of household jobs due to companies’ commitment to service and innovation in risk management for agricultural production.”
Caleb Hopkins, Loan Production Officer for First Dakota National Bank and is chair of the American Bankers Association’s Agricultural and Rural Bankers Committee said in his testimony that agriculture banks are healthy and ready to serve farmers and ranchers. “In 2024, farm banks – banks with more than 14.26 percent of their loans made to farmers or ranchers – increased lending by 6.4 percent to meet the rising needs of farmers and ranchers, and now provide $115 billion in total farm loans,” said Hopkins. “Farm banks are an essential resource for small farmers, holding more than $45.3 billion in small farm loans, with $9.1 billion in micro-small farm loans (loans with origination values less than $100,000). Farm banks are healthy, well capitalized, and stand ready to meet the credit demands of our nation’s farmers large and small.”
Ben Noble, Executive Vice President and Chief Operating Officer for Riceland Foods, highlighted some stark realities for his families farming operation in Arkansas to start the year. “Due to high input costs and lack of profitability over a multi-year period, and the low probability for profitable returns this year, my family is pulling the rip cord. 2025 will be the first year since 1890 – 135 years – that a Noble has not actively farmed in east Arkansas,” said Noble. “We are selling our equipment at an auction this Friday. Our experience is unfortunately not unique, as lenders and farmers across the Mid-South face tough decisions with the prospect of low commodity prices, high input costs, and extreme uncertainty and volatility. This situation has profound and far-reaching effects across the economy and livelihood of rural America.”
Noble also highlighted the role of Riceland Foods as the largest miller and marketer of rice in the United States and the largest marketer of soybeans in the Mid-South. He urged the committee that it is critical that farmers get the lending they need to plant a crop, to keep their farmer-owned cooperative in business. “When our farmers suffer, we suffer,” said Noble. He urged the committee to look at updating reference prices and also having favorable tax policy for farmers and ranchers.
You can view the full testimony of each witness, as prepared, here: https://www.agriculture.senate.gov/hearings/perspectives-from-the-field-risk-management-credit-and-rural-business-views-on-the-agricultural-economy-part-3
