Grinch appears to have won battle over farm bill
Christmas is only 12 days away, and High Plains farmers are likely wondering if a farm bill wish will come true as the Grinch sits high on his perch in Washington.
The farm bill is a gigantic piece of legislation. Estimated to cost $1.5 trillion over 10 years, it is filled with many bells and whistles and important stopgap measures to help those who are food insecure and provide producers and their lenders with certainty as they look to plant crops in 2025.
With few days left before the Christmas break, there has been much discussion, but little action, as lawmakers from both sides of the aisle are more likely to have a lump of coal for ag constituents than a bag of certainty. While we wish that lawmakers could take a few days and hash out their differences, it appears fleeting as the calendar year slips away.
The most recent report from the Federal Reserve Bank of Kansas City, Missouri, has taken note that farm debt balances at commercial banks continued to rise in the third quarter, as report writers Cortney Cowley and Ty Kreitman noted that growth in agricultural production loans has slowed from earlier in the year but remained strong. The economists said,
“Increases in farm and non-farm loan balances continued to outpace growth in deposits, and liquidity ratios at agricultural banks tightened further, particularly those most concentrated in farm lending. Despite higher debt balances and softening farm financial conditions, delinquency rates on agricultural loans remained low.”
What has carried financial balance sheets has been equity in farm real estate, and lenders are able to hang their hats on quality land value continuing to increase in value, albeit at a slower pace than a couple of years ago. Plus, those in the livestock markets—notably beef and pork production—have seen prices that have remained bullish. How long that will remain in place is unknown.
Farmers, ranchers and lenders all would like to see a bill that could provide a reasonable safety net, and that might be key if President-elect Donald Trump’s influence on tariffs goes beyond a negotiating ploy and becomes a reality. Long-time observers are trying to ward off a further slump in gain prices. In the past week, the prices in Dodge City markets saw wheat at $4.77 a bushel, corn at $4.57 a bushel, sorghum at $4.07 a bushel and soybeans at $9.07 a bushel.
High Plains producers know those prices are below the cost of production, and, after the holidays, when prices historically start to increase, there is angst that they could stay sideways at best—unless there is a geopolitical conflict.
Our best hope is to get a farm bill that from a producers’ perspective can take on new realities of the marketplace, noting that drought assistance and natural disasters are likely to be hanging around in 2025 and beyond.
Thankfully, a year ago Congress was able to push through an extension, but aggie lawmakers know that a second extension gets tougher to swallow because many market factors that were part of the 2018 bill have changed.
While there is little hope for a farm bill at Christmas, maybe the new year will bring new negotiations. Many observers will be watching.
Dave Bergmeier can be reached at 620-227-1822 or [email protected].
