Washington, D.C. (May 25, 2017) – Today, the Senate Committee on Agriculture, Nutrition, and Forestry held a hearing to examine the farm economy in rural America. Members heard testimony from USDA Chief Economist Robert Johansson who spoke on several domestic and global factors generating low commodity prices and the financial implication this has on farmers. Additional witnesses included Nathan Kauffman, assistant vice president and Omaha branch executive with the Federal Reserve Bank of Kansas City; Bruce Weber, professor emeritus of applied economics and director of the rural studies program at Oregon State University; and Alec Sheffer, director of retail sales for Agri-AFC.
NAWG President David Schemm made the following statement:
“With the rural economy struggling and farm income down 46 percent from only three years ago, growers are enduring some of the toughest economic conditions since the 1980s. Farmers have also had to deal with severe weather issues, making the Farm Bill a key tool to enable them to farm another year.
“Low commodity prices have led to farmers to take on more debt to continue operating, as such producers’ debt-to-asset ratios have grown rapidly. USDA’s Chief Economist Dr. Robert Johansson testified that nearly 8% of wheat producers are considered to be ‘highly leveraged’ and over 16 percent are ‘very highly leveraged’.
“Farmers have had to deal with a rapidly declining market, and months and years of sustained low prices will make each passing year more difficult to get by, particularly for young and beginning farmers who weren’t able to build up reserves during the high price years.
“The economic conditions of the past few years have also contributed to a drop in planted wheat acreage. Plantings for 2016-2017 winter wheat are at the lowest level since 1909, and it is anticipated that overall planted acres of wheat will be at historically low levels this year. Compounding these factors has been growing impact of wheat streak mosaic virus in my neck of the woods which is causing a big yield hit to the wheat that survived the blizzard.
“NAWG applauds the Senate Committee on Agriculture for holding this hearing to evaluate the economic conditions in rural America.”