By former USDA Secretary John R. Block
We read and hear so much about our weak economy. The stock market is going through a correction. Well, that is what is happening on the farm, too. Not just our farms, but European farms also.
U.S. farmers are looking at a 36% plunge in net farm income – lowest in 9 years – our crop and livestock receipts down more than 30 billion dollars.
It seems like yesterday agriculture was riding high. The world couldn’t get enough of what we produce. Net farm income this year will come in at one-half of what it was just 2 years ago. After 2 years of record production, the collapse in prices is broad; crop prices – below last year by 11%; livestock down 5.5%. Almost every product is down – milk, pork, beef, corn, soybeans, wheat – all down.
The positive markets are in fruits, nuts, vegetables, and specialty crops. They will hit 76 billion dollars – a record.
Misery loves company, I guess. Let’s look at Europe. European farmers are crying for government help. Pork and milk prices are squeezing their farmers. Some regions suffered serious drought this year. I saw some of those bad fields when I was in Europe this past July.
One reason EU agriculture is suffering is because they lost a big market when a trading ban was imposed on Russia in response to the Russian invasion of Ukraine.
It’s hard for me to envision how we write a new trade agreement with the EU under such stressful conditions. Nevertheless, trade talks are happening as I give this commentary. It doesn’t help since more than half of the countries in the EU have chosen to disallow the planting of any GE crops.
When we stand back and take a look at the world of agriculture today, we have to admit that we have been here before. Farmers, ranchers and ag suppliers like John Deere, Monsanto, and Pioneer know all about the roller coaster ride that is the business of agriculture. Farmers will have to cut expenses. Land rent prices will have to come down.
I am optimistic about the future. World population is growing and they want more food. We just have to tighten our belt now and be ready to ride the next wave when it comes.
John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. If you would like to review his radio shows going back more than 20 years, visit johnblockreports.com.