America’s favorite groundhog, Punxsutawney Phil, was recently hoisted high into the air as his handlers declared spring is coming.
America’s farmers are hoping that Phil’s prognostication is accurate this year, as snow continues to pile on corn left standing in the field and water pools on rutted farmland.
The U.S. Department of Agriculture (USDA) recently released another forecast that is not as cheerful as Phil’s. Their 2020 Farm Income Forecast does not portray a particularly rosy outlook for the rural economy.
Among the USDA’s predictions:
- Net cash farm income will drop more than $10 billion – or 9 percent – from 2019
- Working capital will continue to decline 15 percent from last year
- Farm debt will increase by nearly $10 billion
- Median farm income will remain in the negatives at -$1,840 per household
Combined with the Farm Bureau’s analysis that Chapter 12 family farm bankruptcies last year increased by nearly 20 percent over 2018 and projections that major commodity prices will remain low, things look outright dismal for farm country. In now its 7th year of recession, the rural economy is struggling. And farmers are feeling the pressure.
A recent Purdue University survey of farm operators found that 56 percent of respondents either have no plans to grow their farm operations or they plan to leave farming altogether. That’s a dramatic increase from just 39 percent from two years ago.
So, when the Office of Management and Budget proposed deep and damaging cuts to the farm safety net earlier this week, the reaction from farm country was swift and it was firm.
Agricultural groups expressed concerns about cuts to crop insurance, agricultural conservation programs, research efforts and food aid.
“It must be understood that issuing cuts to crop insurance can make policies more expensive for farmers. When input costs remain high and commodity prices low, this additional cost could result in many growers not having insurance and may make it difficult for them to stay in business.” – Ben Scholz, National Association of Wheat Growers President and Lavon, TX wheat farmer
“While it is discouraging to hear that the Administration is proposing to balance the budget on the backs of American farmers and those in need, we know that this budget will not be well received by Congress and is essentially dead on arrival.” – Ben Mosely, USA Rice vice president of government affairs
“The federal crop insurance program reacted quickly and efficiently to keep many farmers afloat during this difficult time. It’s no wonder then that the nation’s farm organizations teamed up in late 2019 to ask Congress to reject any attempts to cut crop insurance and weaken the farm safety net when it’s needed most… The proposed cuts will make crop insurance unaffordable and unavailable for farmers, seriously undermining the farm safety net… We urge the White House and Congress to support America’s farmers and ranchers by protecting and strengthening crop insurance.” – Joint statement from the American Association of Crop Insurers, Crop Insurance and Reinsurance Bureau, Crop Insurance Professionals Association, Independent Insurance Agents and Brokers of America, National Association of Professional Insurance Agents, and National Crop Insurance Services
We are confident that Congress recognizes the need to protect the farm safety net and will reject these harmful cuts.