Opinion: America's farm economy - An uncertain future?
By Guest Author
© Copyright Agri-Pulse Communications, Inc.
By Doug Keesling
It's a sad fact, but most Americans today have never met a farmer, or even visited a farm.
Over the decades, the farmland that once surrounded most cities has given way to sprawling suburbs, transforming what was once a largely rural nation only a century ago into an increasingly urban one. And in the process, Americans have lost touch with farms- and with the farmers and farm communities that produce the food on their tables.
That's why most Americans are unaware that U.S. farmers today are facing an uncertain financial future, and that our farm economy is the brink.
Unless they work in agriculture, most Americans probably don't know, for example, that one of the basic building blocks of the farm economy-U.S. grain prices-have plummeted in recent years. The cash price of a bushel of one of those grains, Kansas wheat, is about half what it was a year ago-and less than half of the average $7.48 per bushel paid for Kansas wheat in 2012. The prices of other grains have experienced similar declines.
On the plus side, fuel and fertilizer costs also have fallen. But the lower prices farmers get for their crops cancels out the benefit of those cheaper inputs, even when farmers use more of them to increase production. Boosting production per acre by a third-for example, from 45 bushels to 60- but getting half the price for the yield-$3 in 2016, compared to $6 in 2015 -is still a losing proposition: $180 this year versus $270 in 2015.
Wheat farmers in Kansas-where I farm-had a record crop of 414 million bushels in 2016, even though they planted fewer acres than in an average year. But with wheat prices so low-and the U.S. dollar and shipping costs so high-U.S. farmers are taking a hammering in international markets as other wheat-producing nations whittle down our market share. At the same time, other factors closer to home also are increasing the pressure on our farm communities.
For example, as commodity prices continue their downward spiral, farm income is dropping faster than expenses. But at a time when farmers need to support their operations by tapping into lines of credit, tighter federal banking regulations have made that credit more difficult for farmers to get.
And that's not all. While the average American likely does not think of farming as a highly regulated industry, the fact is that farmers are hemmed in by regulations from all sides.
Regulations from the Environmental Protection Agency, for example, often are drawn up with little regard for their effect on U.S. agriculture, or for farmers' ability to feed the world's growing population. Tax regulations-such as those that cover the inheritance of estates-can have costly consequences that prevent farms from being passed on intact from generation to generation. And a growing body of unfair trade restrictions and one-sided trade pacts continue to hinder the international flow of U.S. agricultural products that often account for our largest exports to many foreign countries. Companies that ship to several states also have to deal with state labeling issues with conflicting states laws. Rising labor costs have cut into farmers profits in an industry that relies heavily on manual labor to plant and harvest crops.
If this jumble of federal regulations weren't bad enough, farmers also must deal with an additional layer of state regulations that impose even further restrictions on how they may use their land and operate their businesses.
And amid all of these regulatory burdens-and falling commodity prices-farmers nonetheless must continue to pay for equipment and repairs, utilities, debt service and other expenses, and still generate enough profit to keep their families and communities financially sound.
The bottom line is this: If things don't change-and soon-the future does not look bright for America's farm economy.
But it doesn't have to be that way-American agriculture needs a new administration that harkens back to our nation's origins by putting those with hands-on farming experience back into the decision-making process.
We need new leaders at the top of the federal government who have an up-close understanding of the agriculture industry's challenges and concerns-not only at the Department of Agriculture, but also at the EPA, Department of Interior and other agencies whose decisions have a profound effect on America's farm economy.
We need policymakers who can roll up their sleeves and simplify the volumes of often conflicting regulations that restrict U.S. agricultural production and trade. We need new leaders who will work to ensure the international competitiveness of our agricultural exports. And we need real leadership at the federal level that's committed to preserving our farm economy and America's rural heritage.
For everyone's sake, let's we hope we have it soon.
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