[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
EXAMINING THE ECONOMIC CRISIS IN FARM
COUNTRY
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 11, 2025
__________
Serial No. 119-1
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Agriculture
agriculture.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
60-714 PDF WASHINGTON : 2025
-----------------------------------------------------------------------------------
COMMITTEE ON AGRICULTURE
GLENN THOMPSON, Pennsylvania, Chairman
FRANK D. LUCAS, Oklahoma ANGIE CRAIG, Minnesota, Ranking
AUSTIN SCOTT, Georgia, Vice Minority Member
Chairman DAVID SCOTT, Georgia
ERIC A. ``RICK'' CRAWFORD, Arkansas JIM COSTA, California
SCOTT DesJARLAIS, Tennessee JAMES P. McGOVERN, Massachusetts
DOUG LaMALFA, California ALMA S. ADAMS, North Carolina
DAVID ROUZER, North Carolina JAHANA HAYES, Connecticut
TRENT KELLY, Mississippi SHONTEL M. BROWN, Ohio, Vice
DON BACON, Nebraska Ranking Minority Member
MIKE BOST, Illinois SHARICE DAVIDS, Kansas
DUSTY JOHNSON, South Dakota ANDREA SALINAS, Oregon
JAMES R. BAIRD, Indiana DONALD G. DAVIS, North Carolina
TRACEY MANN, Kansas JILL N. TOKUDA, Hawaii
RANDY FEENSTRA, Iowa NIKKI BUDZINSKI, Illinois
MARY E. MILLER, Illinois ERIC SORENSEN, Illinois
BARRY MOORE, Alabama GABE VASQUEZ, New Mexico
KAT CAMMACK, Florida JONATHAN L. JACKSON, Illinois
BRAD FINSTAD, Minnesota SHRI THANEDAR, Michigan
JOHN W. ROSE, Tennessee ADAM GRAY, California
RONNY JACKSON, Texas KRISTEN McDONALD RIVET, Michigan
MONICA De La CRUZ, Texas SHOMARI FIGURES, Alabama
ZACHARY NUNN, Iowa EUGENE SIMON VINDMAN, Virginia
DERRICK VAN ORDEN, Wisconsin JOSH RILEY, New York
DAN NEWHOUSE, Washington JOHN W. MANNION, New York
TONY WIED, Wisconsin APRIL McCLAIN DELANEY, Maryland
ROBERT P. BRESNAHAN, Jr., ------
Pennsylvania ------
MARK B. MESSMER, Indiana
MARK HARRIS, North Carolina
DAVID J. TAYLOR, Ohio
______
Parish Braden, Staff Director
Skylar Borchardt, Acting Minority Staff Director
(ii)
C O N T E N T S
----------
Page
Adams, Hon. Alma S., a Representative in Congress from North
Carolina, submitted letter..................................... 138
Craig, Hon. Angie a Representative in Congress from Minnesota,
opening statement.............................................. 4
Prepared statement........................................... 5
Submitted Letter on behalf of Yahaira Caceres, Government
Relations Manager; Vanessa Garcia Polanco, Government
Relations Director, National Young Farmers Coalition....... 136
McGovern, Hon. James P., a Representative in Congress from
Massachusetts, submitted advisory notice....................... 139
Scott, Hon. Austin, a Representative in Congress from Georgia,
submitted article.............................................. 131
Tokuda, Hon. Jill N., a Representative in Congress from Hawaii,
submitted letter............................................... 143
Thompson, Hon. Glenn, a Representative in Congress from
Pennsylvania, opening statement................................ 1
Prepared statement........................................... 3
Vindman, Hon. Eugene Simon, a Representative in Congress from
Virginia, submitted article.................................... 146
Witnesses
Newton, Ph.D., John, Executive Head, Terrain, Washington, D.C.... 6
Prepared statement........................................... 8
Schwertner, Alisha, Owner, Eric and Alisha Schwertner Farms,
Miles, TX...................................................... 23
Prepared statement........................................... 25
Talley, Ryan, Partner, Talley Farms, Arroyo Grande, CA; on behalf
of Specialty Crop Farm Bill Alliance........................... 26
Prepared statement........................................... 27
Submitted question........................................... 149
Weinzierl, Rodney M., Owner, Weinzierl Farms; Executive Director,
Illinois Corn Growers Association; Executive Director, Illinois
Corn Marketing Board, Stanford, IL............................. 57
Prepared statement........................................... 59
Submitted question........................................... 150
EXAMINING THE ECONOMIC CRISIS IN FARM COUNTRY
----------
TUESDAY, FEBRUARY 11, 2025
House of Representatives,
Committee on Agriculture,
Washington, D.C.
The Committee met, pursuant to call, at 10:00 a.m., in Room
1300 of the Longworth House Office Building, Hon. Glenn
Thompson [Chairman of the Committee] presiding.
Members present: Representatives Thompson, Lucas, Austin
Scott of Georgia, Crawford, LaMalfa, Rouzer, Kelly, Bacon,
Bost, Johnson, Baird, Mann, Feenstra, Miller, Moore, Cammack,
Finstad, Rose, De La Cruz, Nunn, Newhouse, Wied, Bresnahan,
Messmer, Harris, Taylor, Craig, Costa, McGovern, Adams, Hayes,
Brown, Davids of Kansas, Salinas, Davis of North Carolina,
Tokuda, Budzinski, Sorensen, Vasquez, Jackson of Illinois,
Thanedar, Gray, McDonald Rivet, Figures, Vindman, Riley,
Mannion, and McClain Delaney.
Staff present: Justin Benavidez, Timothy Fitzgerald,
Justina Graff, John Hendrix, Harlea Hoelscher, Joshua Maxwell,
Benjamin Nichols, Sam Rogers, Patricia Straughn, Trevor White,
John Konya, Faye Thomas, Skylar Borchardt, Britton Burdick,
Kate Fink, Clark Ogilvie, Emily Pliscott, Michael Stein, and
Jackson Blodgett.
OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN
CONGRESS FROM PENNSYLVANIA
The Chairman. The Committee will come to order. Good
morning, everyone. Ladies and gentlemen, welcome to the first
hearing of the 119th Congress for the House Committee on
Agriculture, Examining the Economic Crisis in Farm Country. And
a crisis is exactly what hundreds of thousands of farm families
are facing as we speak. Across the board, commodity prices have
fallen precipitously while input costs remain at or near
record-high levels. For some commodities, returns have been in
the red for several years. Producers are burning their hard-
earned equity and being forced to have incredibly tough
conversations with their lenders to just figure out how to hold
on for one more year. Unfortunately for some, there won't be
one more year.
In fact, the Agriculture and Food Policy Center at Texas
A&M University, which tracks the financial performance of 92
representative farms all across the country, recently stated
that in the 42 years of keeping records at the center, there
has never been a time where there has been such a bleak outlook
over the next 5 years for their representative farms, with
every single major commodity deep in the red. Producers
deciding what to plant this year aren't thinking about what
rotation is likely to make money, but rather, what crops will
cause them to lose the least.
Thankfully, at the end of last year, Congress was able to
come together and enact $21 billion in aid to address weather-
related losses in 2023 and 2024 and $10 billion to partially
offset some of the economic losses experienced in 2024.
Obtaining that aid was not easy, but myself and dozens of other
Members and Senators were prepared to lay down on the tracks to
block the continuing resolution if economic assistance wasn't
included. That is a threat I didn't make lightly, but because
of extreme concerns from the lending community, the desperation
of the agriculture sector, and the threat to the future of farm
families across the country, I could not in good conscience
allow Congress to ignore the needs of our producers. I want to
thank Speaker Johnson and the Members across both sides of the
aisle that helped make that happen. I urge the Senate to act
quickly to confirm Brooke Rollins, who I think will be the best
Secretary of Agriculture of our lifetimes, so that she can
expedite getting that assistance out the door. Farmers and
their lenders cannot wait.
Downturns in agriculture are nothing new, it is and always
has been a cyclical business. But it sure seems like the good
times are shorter and not as profitable as they once were, and
the bad times are lasting longer and are more severe. The needs
of the industry have changed, and this underscores the critical
importance of enacting a new farm bill with a significantly
enhanced safety net. This won't by any means make producers
whole, but a bolstered and properly functioning safety net will
help them to weather the storm. I was proud of the work this
Committee did in the last Congress to advance the Farm, Food,
and National Security Act of 2024 (H.R. 8467, 118th Congress)
in a bipartisan way. Unfortunately for numerous reasons outside
of my control, we weren't able to get that bill across the
finish line, and America's producers are the ones paying the
price. We cannot let this year be a repeat of the last.
I look forward to working with my new Ranking Member,
Congresswoman Angie Craig from the great State of Minnesota, to
get the farm bill over the finish line this year. It oftentimes
feels like here at the Agriculture Committee, our job is to
enact policies, like the safety net, that treat the symptoms
while other committees have jurisdiction over the disease. That
is why I will be working around the clock with my fellow
Chairmen to address the underlying causes of these record-high
input costs, such as burdensome regulations, uncertainty around
taxes, and harmful energy and environmental policies that are
relics of the previous Administration. I will also be working
with the Trump Administration to expand markets and create
demand for U.S. agriculture products. I know there is a lot of
concern about tariffs and potential retaliation, but as we have
seen in just the past 2 weeks with Colombia, Canada, and
Mexico, access to the U.S. consumer provides him powerful
leverage to negotiate with foreign nations and he needs to use
this leverage to advance the America First agenda. I will be
keeping a vigilant watch over these actions and where U.S.
agriculture gets caught in the crossfire, I will be the first
to speak up on behalf of our producers.
I want to thank our witnesses here today. Each and every
one of them has a unique perspective to offer the Members of
this Committee that will help us understand where agriculture
is, where things are headed, and what this Committee needs to
consider as we work to enact a highly effective farm bill.
[The prepared statement of Mr. Thompson follows:]
Prepared Statement of Hon. Glenn Thompson, a Representative in Congress
from Pennsylvania
Ladies and gentlemen, welcome to the first hearing of the 119th
Congress for the House Committee on Agriculture, Examining the Economic
Crisis in Farm Country. And a crisis is exactly what hundreds of
thousands of farm families are facing as we speak. Across the board,
commodity prices have fallen precipitously while input costs remain at
or near record-high levels. For some commodities, returns have been in
the red for several years. Producers are burning their hard-earned
equity and being forced to have incredibly tough conversations with
their lenders to just figure out how to hold on for one more year.
Unfortunately for some, there won't be one more year.
In fact, the Agriculture and Food Policy Center at Texas A&M
University, which tracks the financial performance of 92 representative
farms all across the country, recently stated that in the 42 years of
keeping records at the center, there has never been a time where there
has been such a bleak outlook over the next 5 years for their
representative farms, with every single major commodity deep in the
red. Producers deciding what to plant this year aren't thinking about
what rotation is likely to make money, but rather, what crops will
cause them to lose the least.
Thankfully, at the end of last year, Congress was able to come
together and enact $21 billion in aid to address weather-related losses
in 2023 and 2024 and $10 billion to partially offset some of the
economic losses experienced in 2024. Obtaining that aid was not easy,
but I and dozens of other Members and Senators were prepared to lay
down on the tracks to block the continuing resolution if economic
assistance wasn't included. That is a threat I didn't make lightly, but
because of extreme concerns from the lending community, the desperation
of the agriculture sector, and the threat to the future of farm
families across the country--I could not in good conscience allow
Congress to ignore the needs of our producers. I want to thank Speaker
Johnson and the Members across both sides of the aisle who helped make
that happen. I urge the Senate to act quickly to confirm Brooke
Rollins--who I think will be the best Secretary of Agriculture of our
lifetimes--so that she can expedite getting that assistance out the
door. Farmers and their lenders cannot wait.
Downturns in agriculture are nothing new, it is and always has been
a cyclical business. But it sure seems like the good times are shorter
and not as profitable as they once were, and the bad times are lasting
longer and are more severe. The needs of the industry have changed, and
this underscores the critical importance of enacting a new farm bill
with a significantly enhanced safety net. This won't by any means make
producers whole, but a bolstered and properly functioning safety net
will help them weather the storm. I was proud of the work this
Committee did in the last Congress to advance the Farm, Food, and
National Security Act of 2024 in a bipartisan way. Unfortunately for
numerous reasons outside of my control, we weren't able to get that
bill across the finish line, and America's producers are the ones
paying the price. We cannot let this year be a repeat of the last.
I look forward to working with my new Ranking Member, Congresswoman
Angie Craig from the great State of Minnesota, to get the farm bill
over the finish line this year. It oftentimes feels like here at the
Agriculture Committee, our job is to enact policies--like the safety
net--that treat the symptoms while other committees have jurisdiction
over the disease. That is why I will be working around the clock with
my fellow Chairmen to address the underlying causes of these record-
high input costs, such as burdensome regulations, uncertainty around
taxes, and harmful energy and environmental policies that are relics of
the previous Administration. I will also be working with the Trump
Administration to expand markets and create demand for U.S. agriculture
products. I know there is a lot of concern about tariffs and potential
retaliation, but as we have seen in just the past 2 weeks with
Colombia, Canada, and Mexico--access to the U.S. consumer provides him
powerful leverage to negotiate with foreign nations and he needs to use
this leverage to advance the America First agenda. I will be keeping a
vigilant watch over these actions and where U.S. agriculture gets
caught in the crossfire, I will be the first to speak up on behalf of
our producers.
I want to thank our witnesses here today. Each and every one of
them has a unique perspective to offer the Members of this Committee
that will help us understand where U.S. agriculture is, where things
are headed, and what this Committee needs to consider as we work to
enact a highly effective farm bill.
The Chairman. I would now like to welcome the distinguished
Ranking Member, the gentlelady from Minnesota, Ms. Craig, for
any opening remarks she would like to give.
OPENING STATEMENT OF HON. ANGIE CRAIG, A REPRESENTATIVE IN
CONGRESS FROM MINNESOTA
Ms. Craig. Thank you so much, Chairman Thompson, and thank
you for organizing this extremely timely hearing on the
economic crisis in farm country. Thank you to my colleagues on
both sides of the aisle for your commitment to helping our
nation's farmers achieve our historic mission to feed, clothe,
and fuel the world.
And thank you to our witnesses here today to help us, and
more importantly, the country, better understand the crisis we
are facing, and perhaps more importantly, how the decisions we
make as leaders can support each of you.
This Committee, more than most, has historically worked on
a bipartisan basis to help give farmers and ranchers the
certainty they need. Mr. Chairman, I look forward to working
with you toward the goal of a bipartisan farm bill that can get
the support of the majority of Republicans and Democrats in the
119th Congress.
I don't have to tell our witnesses that for most in farm
country, folks have been struggling. My Minnesota farmers tell
me every day. High input costs, low prices, stubborn inflation,
bird flu, droughts, floods, changes in consumer behavior, and
general market volatility have made it increasingly difficult
for America's family farmers. We know that our farmers and
producers across rural America wake up wondering whether they
will get enough or too much rain this year, suffer an early
frost, get the credit they need by planting season, or have
their fuel supply impacted by a war halfway around the world.
And that is before the additional uncertainty injected into the
conversation these past 3 weeks. Consider that grant dollars to
farmers appropriated by Congress and already under contract
with USDA have been frozen. Trade wars with our largest trading
partners and largest export markets have been threatened. Food
grown in America is rotting in a warehouse in Texas.
We all know, just like before, that trade wars will
inevitably lead to retaliatory tariffs on American farmers. We
know that cutting off foreign food assistance programs also
cuts off a major market and farm income. These actions hurt the
rural communities and family farmers we represent on this
Committee. We know that Congress must also do its part to bring
more certainty to farmers.
And that brings me to the farm bill. Farmers need a new
farm bill to provide some semblance of stability for their
business and their families, one that strengthens the farm
safety net, cuts red tape, and provides new opportunities for
new and beginning farmers. The best farm bill is not one that
looks pretty on paper or makes promises that it can't deliver.
It is the one that has the votes to pass the House, the Senate,
and get signed into law. We stand ready to negotiate a
bipartisan bill.
Farmers across the country, whether they use PLC, ARC, or
crop insurance need a farm bill to keep feeding our communities
and the world. Mr. Chairman, this Committee has always found a
way for Democrats and Republicans to come together with the
common goal of supporting our farmers and rural communities,
and making sure our communities, no matter where they live,
have food on the table.
My grandfather was a farmer. I know it takes faith and a
lot of hard work. I want to thank the witnesses before us today
for doing all that you do to help feed, clothe, and fuel this
country. Your time and perspective are greatly appreciated.
[The prepared statement of Ms. Craig follows:]
Prepared Statement of Hon. Angie Craig, a Representative in Congress
from Minnesota
Thank you, Chairman Thompson for organizing this extremely timely
hearing on the economic crisis in farm country. Thank you to my
colleagues on both sides of the aisle for your commitment to helping
our nation's farmers achieve our historic mission to feed, clothe, and
fuel the world. And thank you to our witnesses here today to help us--
and the country--better understand the crisis we are facing and perhaps
more importantly, how the decisions we make as leaders can support you.
This Committee--more than most--has historically worked on a
bipartisan basis to help give farmers and ranchers the certainty they
need. Mr. Chairman, I look forward to working with you toward the goal
of a bipartisan farm bill that can get the support of the majority of
Republicans and Democrats in the 119thCongress.
I don't have to tell our witnesses that for most in farm country--
folks have been struggling. My Minnesota farmers tell me every day.
High input costs, low prices, stubborn inflation, bird flu, droughts,
floods, changes in consumer behavior and general market volatility have
made it increasingly difficult for America's family farmers. We know
that our farmers and producers across rural America wake up wondering
whether they'll get enough or too much rain this year; suffer an early
frost; get the credit they need by planting season or have their fuel
supply impacted by a war halfway around the world.
And that's before the additional uncertainty injected into the
conversation these past 3 weeks. Consider: grants dollars to farmers
appropriated by Congress and already under contract with USDA have been
frozen, trade wars with our largest trading partners--and largest
export markets--have been threatened, food grown in America is rotting
in a warehouse in Texas.
We all know--just like before--that trade wars will inevitably lead
to retaliatory tariffs on American farmers. We know that cutting off
foreign food assistance programs also cuts off a major market and farm
income. These actions hurt the rural communities and family farmers we
represent on this Committee.
We know that Congress must also do its part to bring more certainty
to farmers--and that brings me to the farm bill. Farmers need a new
farm bill to provide some semblance of stability for their businesses
and their families--one that strengthens the farm safety net, cuts red
tape and provides opportunities for new and beginning farmers.
The best farm bill is not the one that looks pretty on paper or
makes promises it can't deliver. It's the one that has the votes to
pass the House, the Senate and get signed into law. We stand ready to
negotiate a bipartisan bill.
Farmers across the country, whether they use PLC, ARC or crop
insurance, need a farm bill to keep feeding our communities and the
world.
Mr. Chairman, this Committee has always found a way for Democrats
and Republicans to come together--with the common goal of supporting
our farmers and rural communities and making sure our communities--no
matter where they live--have food on the table.
My grandfather was a farmer. I know it takes faith and a lot of
hard work. I want to thank the witnesses before us today for doing all
that you do to help feed, clothe and fuel this country. Your time and
perspective are greatly appreciated.
Mr. Chairman, thank you for treating me to the Pennsylvania Ag
Show, with you last month. And with that, I yield back.
Ms. Craig. Mr. Chairman, thank you for treating me to the
Pennsylvania Ag Show with you last month. And with that, I
yield back.
The Chairman. The chair would ask that other Members submit
their opening statements for the record so the witnesses may
begin their testimony, and to ensure that there is ample time
for questions.
Our first witness today is Dr. John Newton, the Executive
Head of Terrain. Our next witness is Ms. Alisha Schwertner, the
owner of Eric and Alisha Schwertner Farms in Miles, Texas. Our
third witness today is Mr. Ryan Talley, a partner with Talley
Farms in Arroyo Grande, California.
And I will now turn it over to the gentlelady from
Illinois, Representative Budzinski, to introduce our final
witness.
Ms. Budzinski. Thank you, Mr. Chairman, for the opportunity
to introduce our final witness. I am thrilled to welcome my
friend, Rodney Weinzierl, to this hearing today.
Mr. Weinzierl is a farmer from Stanford, Illinois, who has
been operating his third-generation corn and soybean farm with
his wife for the past 26 years. He brings with him a wealth of
experience in the agricultural sector, and an important outlook
on the farm economy through his lived experience as a farmer in
the top corn and soybean producing county in the nation.
Mr. Weinzierl, thank you so much for joining us today and
for sharing your testimony before the Committee.
Thank you, Mr. Chairman.
The Chairman. I thank the gentlelady. Thank you to all of
our impressive witnesses for joining us today.
We will now proceed to your testimony. You will each have 5
minutes. The timer in front of you will count down to zero, at
which point, your time is expired.
Dr. Newton, please begin when you are ready.
STATEMENT OF JOHN NEWTON, Ph.D., EXECUTIVE HEAD, TERRAIN,
WASHINGTON, D.C.
Dr. Newton. Chairman Thompson, Ranking Member Craig, and
Members of the Committee, thank you for inviting me to testify
before you today. My name is John Newton. I am the Executive
Head of Terrain.
Terrain is tasked with analyzing agricultural economic
issues for our partnering Farm Credit associations. I
frequently meet with farmers and ranchers in the communities
they call home to understand their challenges and
opportunities. My testimony today reflects these perspectives
and is supported by data-driven analysis.
Since the high-income environment of 2022, we have seen the
tale of two farm economies. Over the last 3 years, inflation-
adjusted net cash farm income for corn and soybean farm
families has dropped by 45 percent to their lowest levels in a
decade and a half. Meanwhile, record cattle prices and higher
milk prices have contributed to higher levels of income for
those farm families, providing an opportunity for them to
finally rebuild their balance sheets from the pandemic era
lows, though other challenges remain.
USDA's net farm income is a broad measure of the financial
conditions across the U.S. farm sector, and is the flagship
measurement of the overall health of the U.S. farm economy.
Driven by record agricultural exports, increased domestic
demand, and pandemic related Federal support, inflation
adjusted net farm income reached a record high in 2022 at $198
billion. The rise in farm income, however, coincided with
historic inflation and farm production expenses as input costs
reached a record $462 billion in 2022, remaining near those
historically high levels still today.
With input costs slow to decline, pressure has been
mounting as many farm families have worked through their
working capital and are now faced with tough decisions on how
to reduce expenses without giving up hard-earned access to land
or compromising productivity.
Since 2022, and excluding government payments, U.S.
inflation adjusted net farm income has fallen by $43 billion,
or 26 percent, to $138 billion in 2025. We are witnesses to
historic volatility in the farm economy.
For many crop and specialty crop farmers, margins have been
tight or below break-even for several years because of
inflation in input costs and lower farmgate prices. Through the
foresight of this Committee, the American Relief Act of 2025
(Pub. L. 118-158) provided USDA with more than $30 billion to
deliver ad hoc financial assistance to farmers experiencing
economic and natural disasters. When including the ad hoc
Federal support, U.S. inflation adjusted net farm income is
projected at $180 billion, up 26 percent from last year. I know
firsthand, however, that farmers would rather get their returns
from the market, but in today's farm economy, it is ad hoc
support that is propping up their incomes.
These economic assistance payments offset only a portion of
a farmer's negative margins, and are only a bridge until a new
5 year farm bill can be authorized by Congress.
As we have seen for the last decade, U.S. agriculture
continues to face down unprecedented economic challenges that
traditional farm bill programs were ill-equipped to face, and
we have relied too heavily on ad hoc support. Ad hoc support is
unpredictable and cannot be counted on in times of economic
crisis like we are facing today.
The next farm bill can end the reliance on ad hoc support
with enhanced risk management tools. With nearly 350 million
people in the U.S., the cost of critical farm risk management
and conservation programs is less than 8 per meal. Ask anyone
in America if they would support additional investments into
the farm bill to ensure farmers can produce a safer, more
sustainable, and more secure food supply while also being
economically sustainable themselves. The answer will be a
resounding yes.
Farm Credit is there for the farmer through the highs and
the lows of the farm economy. We know firsthand that the sense
of urgency is real in farm country and the opportunity to
enhance the 5 year contract with agriculture and rural America
is now, before it is too late.
Healing an ailing farm economy with a new 5 year farm bill
would be an important first step for the long run success of
U.S. agriculture, our food security, and our national security.
Thank you very much for the opportunity to offer testimony
before you today. I am thankful to every Member of this
Committee for your time and attention, and I look forward to
answering any questions you may have.
Thank you.
[The prepared statement of Dr. Newton follows:]
Prepared Statement of John Newton, Ph.D., Executive Head, Terrain,
Washington, D.C.
Chairman Thompson, Ranking Member Craig, and Members of the
Committee, thank you for inviting me to testify before you today.
My name is John Newton, and I am the Executive Head of Terrain. I
am honored to appear before the Committee to provide insights on
factors contributing to the health of the U.S. farm economy. Terrain is
tasked with researching agriculture, food, risk management and
macroeconomic areas for our partnering Farm Credit associations, which
are AgCountry Farm Credit Services, American AgCredit, Farm Credit
Services of America, and Frontier Farm Credit. The service areas of
these Farm Credit associations span from Iowa, North Dakota and
Wisconsin to New Mexico, California and Hawaii, with many states
between.
I hold a Ph.D. in agricultural and applied economics from The Ohio
State University and have over 2 decades of experience in economic and
policy analysis and development. I recently served as Chief Economist
on the U.S. Senate Committee on Agriculture, Nutrition, and Forestry
for Senator Boozman of Arkansas. Before that, I was the Chief Economist
for the American Farm Bureau Federation, an organization representing
nearly six million family and farm members on Capitol Hill.
In my current and previous roles, I frequently meet with farmers
and ranchers in the communities they call home to understand their
challenges and opportunities. My testimony reflects these grassroots
perspectives and is supported by data-driven analysis.
Thankfully, due to the foresight of leaders of this Committee, as
well as your colleagues in the Senate, the ad hoc assistance provided
in the American Relief Act of 2025 will bring much-needed relief to
farmers who have experienced multiple years of declining revenues and
farm income, as well as those who have faced catastrophic natural
disasters on their farm. However, since the high-income environment of
2022, we have seen a tale of two farm economies: Crop producers have
experienced significant challenges due to low prices and high inputs,
while some livestock producers have benefited from high cattle and milk
prices, helping to offset elevated input costs.
For example, since 2022, inflation-adjusted net cash farm income
for corn and soybean farmers have dropped by 45% to their lowest levels
in a decade and a half. Meanwhile record cattle prices have contributed
to higher levels of income since 2022--providing an opportunity for
those farmers and ranchers to finally rebuild their balance sheets from
the pandemic-era lows.
A Tale of Two Farm Economics
Change in Inflation-Adjusted Net Cash Farm Income, 2022 to 2025
* Lowest level in last 15 years.
Sources: USDA ERS February 2025 Farm Sector Income Forecast,
Terrain.
Farm Economic Conditions
The flagship measurement of the overall health of the U.S. farm
economy is the USDA's net farm income, which measures the difference
between total gross farm income and total production expenses and is a
broad measure of the financial conditions across the U.S. farm
sector.\1\
---------------------------------------------------------------------------
\1\ USDA Economic Research Service, ``Farm Sector Income &
Finances,'' https://www.ers.usda.gov/topics/farm-economy/farm-sector-
income-finances.
---------------------------------------------------------------------------
Driven by record agricultural export sales, increased domestic
demand, and pandemic-related Federal support, inflation-adjusted net
farm income reached a record high in 2022 at $198 billion. The rise in
farm income, however, coincided with historic inflation as post-
pandemic supply chain disruptions and reduced labor availability drove
up costs across all sectors of the U.S. economy. For food- and energy-
related products, Russia's invasion of Ukraine further reduced global
stockpiles of critical grains and oilseeds; disrupted global trade
flows; and drove food, energy and fertilizer prices to record highs.
Nominal farm production expenses reached a record of $462 billion
in 2022 and remain near those historically high levels as input costs
have not eased for farm families across the country. For example, crop
production costs are projected to be higher this year for seed,
chemicals, custom work, repairs, maintenance and taxes, while lower
costs are projected for fertilizers, energy and interest.
With input costs slow to decline, pressure has been mounting for 3
consecutive years across the farm economy--specifically for crop and
specialty crop farmers. Many farmers have worked through their working
capital and are now faced with tough decisions on how to reduce
expenses without giving up hard-earned access to land or compromising
productivity. The reality on the ground is that between 2022 and 2025,
and driven by lower crop prices and elevated inputcosts, the USDA's
Farm Sector Income Forecast shows that:
Since 2022, and excluding government payments to
agriculture, U.S. inflation-adjusted net farm income has fallen
by $43 billion or 26%. U.S. net farm income (excluding
government support) is projected at $138 billion in 2025, up
slightly from 2024 when adjusted for inflation.
When including the ad hoc Federal support provided by
Members of this Committee and your colleagues in the Senate
during the last Congress, alongside traditional government
support from commodity and conservation programs, U.S.
inflation-adjusted net farm income is projected at $180
billion, up 26% from last year.
Ad Hoc Aid to Lift Farm Economy, 2025
Inflation-Adjusted U.S. Net Farm Income (With and Without Federal
Support), 2000 to 2025 Forecast
Sources: USDA ERS February 2025 Farm Sector Income Forecast,
Terrain.
The USDA's Farm Sector Income Forecast shows that U.S. crop farmers
have experienced 3 consecutive years of declining cash receipts,
falling from an inflation-adjusted value of $307 billion in 2022 to
$240 billion in 2025--a decline of $67 billion, or 22%. For many
farmers--and depending on their management, marketing, land ownership
and risk management decisions--margins may have been tight, or returns
may have been below break-even, for several years because of inflation
in farm production expenses and lower farm-gate prices.
Inflation-adjusted cash receipts for livestock have fallen $7
billion since 2022 and those producers continue to face new challenges.
Input costs remain elevated, and goals to capitalize on higher cattle
or milk prices face headwinds due to issues with drought conditions,
low inventory levels, and rising animal disease risks. Despite these
challenges, for some, cash receipts for livestock, dairy, and poultry
farmers have remained stable--preventing a much wider economic crisis
in farm country.
Crop Farm Prices, Input Costs and Margins for 2025
Last year, the USDA provided an early release of supply, demand and
price projections to 2034 for select commodities.\2\ Terrain analysis
a of the data revealed that for the upcoming 2025/26 crop
year (that is, the crop that farmers will plant this spring), the
national marketing year average corn price is projected at $3.90/bushel
(bu.), down 40% from the recent high of $6.54/bu. Soybean prices are
projected at $10/bu., down 30% from 2 years ago. All major crops except
wheat are expected to see lower or flat prices for the upcoming crop
year. This upcoming crop year, wheat prices are projected to climb to
$5.80/bu., yet wheat prices will remain 34% lower than the price
farmers received just a few short years ago.\3\
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\2\ ``Early-Release Tables from USDA Agricultural Projections to
2034,'' https://www.usda.gov/about-usda/general-information/staff-
offices/office-chief-economist/commodity-markets/baseline-projections.
\a\ https://www.terrainag.com/insights/crop-margins-likely-to-
remain-tight-in-2025/.
\3\ John Newton, ``Crop Margins Likely to Remain Tight in 2025,''
December 2024, Terrain, https://www.terrainag.com/insights/crop-
margins-likely-to-remain-tight-in-2025/.
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As I have indicated, input costs have been slow to adjust, and this
spring the cost of production for major field crops is expected to
remain elevated.\4\ Crop input costs this year are expected to be the
highest for rice at more than $1,300/acre (ac.). Next come peanuts,
then cotton. For cotton, the cost of production is forecast at $900/ac.
The cost to produce an acre of corn is projected at $871/ac., and for
soybeans the projected cost of production is $625/ac. To put these
costs into perspective, according to the USDA Census of
Agriculture,b the average-sized corn farm in the U.S. is 279
acres, which equates to nearly $250,000 in total costs to plant a crop,
with no guarantee that Mother Nature will do her part.\5\
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\4\ USDA Economic Research Service, ``Cost-of-Production Forecasts
for Major U.S. Field Crops, 2024F-2025F,'' https://www.ers.usda.gov/
data-products/commodity-costs-and-returns.
\b\ https://www.nass.usda.gov/Publications/AgCensus/2022/
index.php#full_report.
\5\ USDA Census of Agriculture, https://www.nass.usda.gov/
Publications/AgCensus/2022/index.php.
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Given these high input costs and expectations for crop prices to
mostly move lower again in 2025, it is no surprise that another year of
margins at or below break-even is on the horizon. Even the University
of Illinois' 2025 Crop Budgets confirm crop prices and revenues will be
below break-even for high-productivity farmland in Central Illinois.\6\
The most recent crop market outlook from the Agricultural and Food
Policy Center at Texas A&M University reveals that many farms in each
of their four commodity types (feedgrains, cotton, rice and wheat) are
not expected to have a positive cash flow over the next 5 years and
there is no crop rotation that yields a positive return.\7\
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\6\ Farmdoc University of Illinois, ``Revised 2025 Illinois Crop
Budgets Including Breakeven Corn and Soybean Prices,'' https://
www.youtube.com/watch?v=WSDcsi0IwLE.
\7\ Joe L. Outlaw and Bart L. Fischer, ``Why the Current Economic
Downturn Is So Troublesome,'' Southern Ag Today, January 30, 2025,
https://southernagtoday.org/2025/01/30/why-the-current-economic-
downturn-is-so-troublesome/.
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Based on Terrain's analysis c of current price and yield
expectations, for the 2025/26 marketing year, the revenue shortfall is
expected to be the largest for cotton at $339, or 38% below break-even.
Other crops such as grain sorghum are projected at $174, or 40% below
break-even, and corn at $161, or 19% below break-even. Importantly, for
every major U.S. field crop, the projected revenue in 2025 is below the
projected cost of production, marking the third year in a row of low or
negative economic returns, on average, for crop farm families.
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\c\ https://www.terrainag.com/insights/crop-margins-likely-to-
remain-tight-in-2025/.
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Margins Expected to Remain Tight in 2025
National Average Estimates, Dollars per Acre, 2023/24 to 2025/26
Projected
Sources: USDA Economic Research Service Cost of Production
Estimates, January 2025 WASDE Early-Release Tables from USDA
Agricultural Projections to 2034, FAPRI, Terrain.
The Impact of Bridge Economic Assistance for Farmers
In response to this historic and ongoing decline in the farm
economy, and through the foresight of leaders of this Committee, the
American Relief Act of 2025 provided the USDA with nearly $10 billion
to deliver ad hoc financial assistance to crop farmers experiencing
economic disasters as well as more than $20 billion to help farmers
recover from catastrophic natural disasters such as hurricanes,
wildfires and drought.\8\ According to the American Farm Bureau
Federation, in recent years, catastrophic natural disasters have
resulted in agriculture-related losses in the tens of billions of
dollars.\9\
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\8\ The American Relief Act of 2025, https://docs.house.gov/
billsthisweek/20241216/ARA%2012.20.pdf.
\9\ Daniel Munch, ``Natural Disaster Relief for Farmers: Incomplete
Since 2022,'' November 8, 2024, American Farm Bureau Federation,
https://www.fb.org/market-intel/natural-disaster-relief-for-farmers-
incomplete-since-2022.
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Terrain's analysis d indicates that for major crops such
as corn, soybeans, wheat, sorghum, oats and cotton, the estimated
economic assistance payments (excluding payments related to natural
disasters) offset only a portion of a crop farm's negative margin.\10\
Terrain's estimates further indicate that these economic assistance
payments could range from a high of $87/ac. for cotton to a low of $29/
ac. for soybeans, and nationally will average approximately $38/ac.
Unfortunately, in no case do these program payments bring farm cash
flow levels even close to break-even.
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\d\ https://www.terrainag.com/insights/what-farmers-can-expect-
from-the-american-relief-act/.
\10\ John Newton, ``What Farmers Can Expect From the American
Relief Act,'' January 2025, Terrain, https://www.terrainag.com/
insights/what-farmers-can-expect-from-the-american-relief-act/.
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What Will Farmers in Each State Receive?
Average Economic Assistance Payments, Dollars per Acre
$38/Acre Average Economic Assistance Payment per Acre.
Sources: USDA ERS, USDA NASS, USDA FSA, Terrain.
These economic assistance payments are only a bridge until a new 5
year farm bill can be authorized by Congress. These dollars are much
needed as farmers prepare for the upcoming growing season. However,
while these one-time payments will help to improve working capital,
based on crop price and yield projections from the January 2025 World
Agricultural Supply and Demand Estimates, many farmers are still
projected to experience tight or negative margins after accounting for
the economic assistance payments, amplifying the need for a new 5 year
farm bill with enhanced risk management tools.\11\
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\11\ USDA World Agricultural Outlook Board, World Agricultural
Supply and Demand Estimates, https://www.usda.gov/about-usda/general-
information/staff-offices/office-chief-economist/commodity-markets/
wasde-report.
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Tight Margins and American Relief Act Payments
National Average Estimates, Dollars per Acre, 2024 Crop Year
* Based on USDA cost-of-production estimates and revenue per
acre from the January 2025 WASDE.
Sources: USDA ERS, USDA NASS, USDA FSA, Terrain.
Agricultural Trade and the Farm Economy
In the years preceding the high-farm-income environment, several
new trade agreements were negotiated and agreed upon with countries
around the world that impacted the economic success of U.S.
agriculture. These included the Economic and Trade Agreement Between
the United States of America and the People's Republic of China, the
United States-Mexico-Canada Agreement, and the U.S.-Japan Trade
Agreement.12, 13, 14
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\12\ United States Trade Representative, ``Economic and Trade
Agreement Between the Government of the United States of America and
the Government of the People's Republic of China Text,'' https://
ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-
china/phase-one-trade-agreement/text.
\13\ United States Trade Representative, ``United States-Mexico-
Canada Agreement,'' https://ustr.gov/trade-agreements/free-trade-
agreements/united-states-mexico-canada-agreement.
\14\ United States Trade Representative, ``Fact Sheet on U.S.-Japan
Trade Agreement,'' https://ustr.gov/about-us/policy-offices/press-
office/fact-sheets/2019/september/fact-sheet-us-japan-trade-agreement.
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By Fiscal Year (FY) 2022, the value of U.S. agricultural exports
had reached a record high of $196 billion and contributed to the
financial success of many farm families across the country.\15\ While
food and agricultural imports were also on the rise, the U.S.'s
agricultural industry remained mostly in a position of positively
contributing to the U.S. trade balance with the rest of the world--a
position that U.S. agriculture until only recently had held for the
better part of 5 decades.
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\15\ USDA Economic Research Service, ``U.S. Agricultural Trade--
Outlook for U.S. Agricultural Trade,'' https://www.ers.usda.gov/topics/
international-markets-us-trade/us-agricultural-trade/outlook-for-us-
agricultural-trade.
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Now, in FY25, the U.S. agricultural trade deficit is projected to
be the largest in history at nearly $46 billion, according to the
USDA's Economic Research Service. While the value of the dollar, demand
for year-round access to fruits and vegetables, and demand for imported
alcoholic beverages contribute to record food and agricultural imports,
the value of U.S. exports has fallen sharply--projected at $170 billion
in FY25 and down $26 billion from FY22's record.\16\
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\16\ USDA Economic Research Service, ``U.S. Agricultural Trade--
Outlook for U.S. Agricultural Trade,'' https://www.ers.usda.gov/topics/
international-markets-us-trade/us-agricultural-trade/outlook-for-us-
agricultural-trade.
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U.S. Agricultural Trade and Trade Balance
U.S. Agricultural Exports, Imports and Trade Balance, Actual and
Projected, Fiscal Year
Sources: USDA FAS GATS, USDA ERS, Terrain.
The ripple effect of slower U.S. agricultural exports hits the farm
economy, farm families and rural Main Street, and is a large
contributor to the decline in crop cash receipts and overall net farm
income since 2022.
To reverse the record-large trade deficit in agriculture, a
priority should be placed on finding and developing new markets for
U.S. agriculture, reducing non-tariff barriers to trade, accelerating
the adoption of science-based production practices, and improving
existing market access in the major economies with which U.S.
agriculture does business and those we desire to do business with.
To assist in export market access and development, the USDA
allocated $174 million through the Market Access Program (MAP) and
allocated $27 million through the Foreign Market Develop Program (FMD)
to collaborating organizations in FY24, but more can be done. The Farm,
Food, and National Security Act of 2024, passed out of Committee in the
118th Congress, would have doubled funding to MAP/FMD--providing
increased opportunities for farmers, ranchers and their collaborating
organizations to close the gap in our agricultural trade deficit in the
years to come.\17\
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\17\ House Committee on Agriculture, ``Farm, Food, and National
Security Act of 2024,'' https://agriculture.house.gov/farmbill/.
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Under the current Administration, tariffs are either in effect or
under consideration in major U.S. agricultural export markets. Although
none of these markets has enacted retaliatory measures directly
affecting U.S. agriculture or farmers and ranchers, it is crucial to
closely monitor economic implications of these tariffs on farm-level
income, supply chains, and the consumption of food and agricultural
products. This evaluation will be essential if Congress ultimately
needs to contemplate market interventions or ad hoc support measures to
protect farmers and their rural communities from retaliation.
Enhanced Risk Management Is Critical in Farm Country
Farm Credit has been a partner with the USDA for decades in the
delivery of Federal crop insurance to our nation's farmers and
ranchers. Since 2014, the USDA's Risk Management Agency has worked with
the industry to make over 300 crop insurance modifications, including
the introduction of new policies through the 508(h)-development process
to manage new risks. Notable developments include:
New policies to manage the risk of rising input costs on
farm margins
New area-based plans of insurance with higher levels of
coverage
Expanded options for livestock producers such as Dairy
Revenue Protection (Dairy-RP)
Higher premium cost-sharing for cattle and hog farmers
Through various modifications and enhancements, Farm Credit aims to
provide the necessary tools and insights, including those offered by
Terrain,e to assist farmers in managing the risk associated
with price declines or crop losses through crop insurance. Several Farm
Credit associations have invested in new technologies to help crop and
livestock farmers make informed crop insurance decisions. For example,
Optimum f uses a simulation process that combines prices,
yields, and Federal crop insurance policy frameworks to determine how
different combinations of crop insurance products can perform in
helping farmers manage their risk. Through Optimum, farmers can better
take advantage of market opportunities before the growing season to
maximize revenue and reduce risk, providing them the financial security
to better market their crop during the growing season.
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\e\ http://www.terrainag.com/.
\f\ https://www.fcsamerica.com/insurance/resources/optimum.
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Even with all the opportunities and tools the Federal Crop
Insurance Program and Farm Credit provide, my research suggests that
the most common crop insurance policies for managing risk will not
cover break-even expenses for most crop farmers in 2025. For example,
using county-level non-irrigated yield information from the USDA's Risk
Management Agency, Chicago Mercantile Exchange settlement price for
new-crop corn of $4.60/bu., and the most common crop insurance policy
purchased in each county, crop insurance guarantees cover 70% of USDA
Economic Research Service production costs in just over 60% of corn-
producing counties. In about \1/4\ of these counties, insurance
guarantees cover only 50% of the USDA's estimated production costs.
Endorsements like the Enhanced Coverage Option, created at the
direct request of growers, enable farmers to buy higher coverage
levels. The USDA's recent premium cost-share improvements make it a
viable risk management option. However, in 2024, slightly more than 15
million acres were insured across 30 crops. Increasing education and
awareness of these endorsements and changes to these endorsements--
alongside other improvements in policy options such as Agriculture Risk
Coverage (ARC) or Price Loss Coverage (PLC)--will help farmers
collaborate with their insurance agents and other stakeholders to
create effective risk management strategies for their farm operation.
Insurance Coverage May Fall Short of Input Costs
Projected Crop Insurance Revenue Guarantee as a Percentage of ERS 2025
Cost-of-Production Estimate for Corn
Sources: Watts and Associates, USDA ERS, Terrain.
State of the Dairy Industry
Dairy is one of the largest portfolios financed by our partner Farm
Credit associations, prompting us to closely monitor the health of the
dairy economy. The number of dairy farms in the U.S. has declined
significantly. According to the most recent Agricultural Censuses, farm
numbers decreased from 39,303 in 2017 to 24,082 in 2022.\18\ Although
the total number of milk cows also fell, it was a less pronounced
decline, from 9.5 million to 9.3 million head, underscoring the rapid
consolidation within the industry.
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\18\ USDA Census of Agriculture, https://www.nass.usda.gov/
Publications/AgCensus/2022/index.php.
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Dairy profitability has been highly uncertain due to the volatility
of managing milk and feed prices alongside rising input costs beyond
feed. Dairy Margin Coverage (DMC) margins, which serve as an overall
indicator of U.S. dairy farm profitability, have fluctuated
dramatically, ranging from an all-time low of $3.52/hundredweight (cwt)
to an all-time high of $15.57/cwt within 15 months from July 2023 to
September 2024.\19\
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\19\ Ben Laine, ``Structural Shifts Ahead in 2025,'' December 2024,
Terrain, https://www.terrainag.com/insights/structural-shifts-ahead-in-
2025/.
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In addition to market-driven volatility, U.S. dairy producers faced
an outbreak of Highly-Pathogenic Avian Influenza (HPAI) in 2023 that
has persisted into 2025. Affected milking herds can experience a
significant reduction in milk production, ranging from 20% to 30%
during the primary month of infection, with minor reductions continuing
in the following months. Since March 2023, there have been 937
confirmed cases in 16 states. Notably, California--the top milk-
producing state in the country--has reported 720 cases and experienced
state-level milk production declines in both November and December
2024, resulting in a shortfall of hundreds of million pounds of milk.
The impact of animal diseases, geopolitical risks, and fluctuations
in supply and demand ultimately affect the mailbox milk price checks
that dairy farmers receive. With slightly more than a quarter of the
U.S. milk supply purchasing livestock insurance, there is an ongoing
need for increased education and awareness regarding the availability
and affordability of risk management tools such as Dairy-RP and
Livestock Gross Margin insurance.
State of the Beef Cattle Industry
Alongside dairy and row crop portfolios, financing for beef cattle
production makes up another large share of the portfolio of our
partnering Farm Credit associations. There are various segments of the
beef cattle industry that we monitor closely, including cow-calf
producers, stocker/backgrounder operations, feed yards and processing.
Drought conditions, the early pandemic-era financial pressures felt
across many segments of the beef cattle supply chain, and the ongoing
decline in the cattle numbers have contributed to a substantial decline
in the number of farms with beef cows. Over the last 5 years alone,
feeder and fed cattle prices have rallied from cycle lows to record
highs. Simultaneously, beef cow and feeder cattle and calf inventories
have continued to decline to more than 60 year lows. As reported in the
USDA's recent cattle inventory report, beef cow numbers, as of January
1, 2025, total 27.9 million head. This is down 0.5%, or 150,000 head,
versus a year earlier. Compared with the most recent cycle peak that
occurred in 2019, beef cow inventories are down 3.8 million head, which
represents a decline of 12%. The report also revealed that cow-calf
operations retained and bred 2% fewer beef replacement heifers during
2024 and retained about 1% fewer heifer calves to grow and breed during
2025. This will make it extremely difficult for any herd rebuilding to
occur before 2027.\20\
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\20\ USDA National Agricultural Statistics Service, ``Cattle
Inventory,'' January 2025, https://usda.library.cornell.edu/concern/
publications/h702q636h?locale=en.
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Even though most beef cow-calf operations have returned to
profitability during this contraction phase of the cattle cycle,
escalating costs have kept record prices from returning record profits.
According to the USDA's Economic Research Service Estimated Costs and
Returns for Cow-Calf Producers,g the total cost of
production reached a record high of $1,729/head in 2024, while the
average returns over variable operating costs are approximately half of
what returns were a decade ago when cattle prices reached similar
levels.\21\
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\g\ https://ers.usda.gov/sites/default/files/_laserfiche/DataFiles/
47913/CowCalfCostReturn.xl
sx?v=90056.
\21\ USDA Economic Research Service, ``Commodity Costs and
Returns,'' https://www.ers.usda.gov/data-products/commodity-costs-and-
returns.
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Emerging forecasts for a return to drought conditions across much
of the major cow-calf production areas, high operating costs, higher
interest rates due to inflation, and advancing average producer age are
holding most cow-calf producers back from thinking of breeding herd
expansion. Many operations are using the opportunity of high prices and
relatively higher revenues to de-leverage their financial position and
improve balance sheets. A return to profitability and a positive
outlook for continued high calf prices has most cattle producers
evaluating the multiple factors that could make or break their
successful herd rebuilding.\22\ The reduction in beef cow and beef
replacement heifer numbers that occurred during 2024 and was confirmed
in the cattle inventory report suggests the beef cow herd may only
stabilize during 2025 and 2026. The current rally in prices for all
classes of cattle and beef has been driven by a simultaneous decline in
cattle numbers and continued year-over-year increases in beef demand.
Cattle and beef producers' focus on consumer tastes and preferences and
delivering a consistent improvement in beef quality has been a winning
strategy.
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\22\ Dave Weaber, ``Growing Optimism for 2025 Fed Cattle Prices,''
December 2024, Terrain, https://www.terrainag.com/insights/growing-
optimism-for-2025-fed-cattle-prices/.
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Current cattle price cycle lows for feeder and fed cattle occurred
in April 2020, during the onset of the COVID-19 pandemic. Now, less
than 5 years later, feeder and fed cattle prices are setting record
highs. Since setting their lows, feeder cattle prices are up 142%
($117/cwt to $277/cwt) and fed cattle prices have rallied 121% ($95/cwt
to $210/cwt).
Improved grazing opportunities and declining feedgrain prices
resulted in modest profitability for the margin-driven stocker and feed
yard cattle operations that grow cattle they have purchased from other
cattle producer segments. However, the record-high prices they paid for
replacement cattle during the fall and winter of 2024--when the number
of available cattle was historically low--may yield financial losses
during the second half of 2025 when they sell those animals.
The record value of the inventory on cattle operations has
underscored the continued and growing need for functional and efficient
risk management tools for all sizes of operations. Producers' access to
tools like Livestock Risk Protection (LRP) and Livestock Gross Margin
(LGM) plans is increasingly important, as they serve backgrounding and
feed yard operations well. Recent enhancements to the programs will
make them even better tools for farmers and ranchers. Some cow-calf
operations are participating in LRP but have additional exposure to
weather, driving poor ranch-level reproductions and reducing calf
growth. The Weaned Calf Risk Protection pilot program could be a
valuable tool for ranchers and farmers, but ongoing education on
program functionality is needed to enhance program adoption.
Specialty Crop and Wine Grape Challenges in California
Specialty crop production in California has faced significant
challenges since the onset of the COVID-19 pandemic. While some crops
have fared better than others, most have experienced either a rapid
increase in costs, a sharp decrease in prices, or both. These
developments have compounded existing challenges in the state's
agriculture sector, such as rising regulatory compliance costs and the
Sustainable Groundwater Management Act (SGMA), which restricts
groundwater pumping and leads to the repurposing of many acres of
production.
Tree nuts, a major portfolio of our partner Farm Credit
associations, have been hit particularly hard. The pandemic disrupted
global shipping lanes, causing inventories of almonds and walnuts to
accumulate in warehouses, which put immediate downward pressure on
prices. Combined with increased costs due to inflation, this resulted
in the lowest profitability on record, according to Terrain
research.\23\ This has forced many farmers to remove acreage, with
bearing walnut acreage already in decline for the first time since
1999, according to the USDA. Almond bearing acreage is also expected to
decline soon.
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\23\ Matt Woolf, ``Low Profitability Likely to Continue for Nut
Crops in 2023/2024,'' October 2023, Terrain, https://www.terrainag.com/
wp-content/uploads/2023/10/Terrain-Nut-Profiita
bility.pdf.
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Weather challenges and economic headwinds contributed to a smaller
wine grape crop in 2024.\24\ U.S. wine grape growers continue to face
growing risk of financial loss due to the increasing prevalence of
wildfires in key West Coast growing regions. Growers suffered
substantial losses in both 2017 and 2020 due to vine damage as well as
the rejection of contracted fruit stemming from actual and perceived
smoke taint. Many estate wineries used only a portion of their fruit or
did not make wine at all, and some smoke-impacted grapes were made into
bulk wine and sold at below-market prices. The estimated financial loss
to California wine grape growers was over $600 million in 2020 alone.
Reflecting the severe losses that occurred in the California grape
industry in 2020, more than $300 million in indemnities were made to
California grape growers, a record high and a clear reason why recent
developments such as Fire Insurance Protection--Smoke Index is much
needed for grape growers subject to fire risks.\25\
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\24\ Chris Bitter, ``Some Light at the End of the Tunnel,''
December 2024, Terrain, https://www.terrainag.com/insights/some-light-
at-the-end-of-the-tunnel/.
\25\ USDA Risk Management Agency, Summary of Business Report
Generator, https://public-rma.fpac.usda.gov/apps/SummaryOfBusiness/
ReportGenerator.
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Farm Bill Is a Five Year Contract with Agriculture
The Congressional Budget Office's January 2025 baseline for
mandatory farm and nutrition programs projected total farm bill
spending at $1.4 trillion over 10 years.\26\ Of that total,
approximately $300 billion is projected for mandatory USDA farm
programs such as crop insurance, commodity income support programs,
livestock disaster programs, conservation and working lands programs,
and trade promotion programs. These critical programs are currently
operating on a 1 year extension through the end of FY25, with no
certainty thereafter.\27\
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\26\ Congressional Budget Office January 2025 Baseline, https://
www.cbo.gov/data/baseline-projections-selected-programs#23.
\27\ The USDA's Federal Crop Insurance Program operates on
permanent authority.
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January 2025 Baseline for Farm Bill Programs
FY 2026 to FY 2035, Billions
$1.4 Trillion estimated cost of USDA mandatory farm,
conservation, and nutrition programs.
* Estimate made based on Congressional Research Service data.
Sources: Congressional Budget Office January 2025 Baseline,
Terrain.
Many of the linchpin farm bill programs that farmers depend upon
need modernization. Since the last 5 year farm bill reauthorization in
2018, the farm bill baseline has increased by $556 billion, or 64%,
with only 17% of that total driven by farm-related programs.
Simultaneously, U.S. agriculture has faced down unprecedented economic
challenges associated with increased catastrophic natural disasters,
disruptions related to COVID-19, and increased price volatility due to
geopolitical risks--challenges that traditional farm bill programs were
ill-equipped to face.
As a result, Congress has intervened on several occasions to
provide ad hoc support, most recently with the American Relief Act of
2025. Since 2018, I estimate that ad hoc support to farmers and
ranchers has totaled more than $132 billion, compared with slightly
more than $20 billion from direct income support programs such as ARC,
PLC or DMC. Ad hoc support has been more than six times higher than the
support from farm bill commodity support programs. While ARC and PLC
are expected to deliver higher levels of support for the 2025/26 crop
year, this is temporary, as support levels will gradually decline each
crop year in a low-price environment.\28\ For other crops like rice or
peanuts, their farm bill support has not materially changed in over a
decade.
---------------------------------------------------------------------------
\28\ John Newton, ``ARC and PLC to Offer Higher Support (for Some)
in 2025,'' January 2025, Terrain, https://www.terrainag.com/insights/
arc-and-plc-to-offer-higher-support-for-some-in-2025/.
---------------------------------------------------------------------------
The farm bill is a 5 year contract with agriculture and rural
America, and it is time to update that contract with our farmers and
ranchers, given the significant Federal support coming from outside the
farm bill. With nearly 350 million people in the U.S. (hopefully
consuming three meals per day), the cost of critical farm risk
management and conservation programs is less than 8 per meal. Ask
anyone in America if they would pay 8 per meal to ensure a safe,
abundant, sustainable and affordable food supply. The answer will be a
resounding yes.
Farm Credit is there for the farmer through the highs and the lows
of the farm economy; we know firsthand that the sense of urgency is
real in farm country and the opportunity to enhance the 5 year contract
with agriculture and rural America is now, before it is too late.
I have spent my entire career working with farm families and deeply
understand the challenges and potential opportunities that lie ahead.
Actions by the Agriculture Committees and Administration play a key
role in the success of U.S. agriculture, our food security and our
national security. Healing an ailing farm economy with a new 5 year
farm bill would be an important first step.
Thank you very much for the opportunity to offer testimony before
you today. I am thankful to every Member of this Committee for your
time and attention, and I look forward to answering any questions you
may have.
powerpoint presentations
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Dr. Newton, thank you very much.
Ms. Schwertner, please begin whenever you are ready.
STATEMENT OF ALISHA SCHWERTNER, OWNER, ERIC AND ALISHA
SCHWERTNER FARMS, MILES, TX
Ms. Schwertner. Chairman Thompson, Ranking Member Craig,
and Members of the House Agriculture Committee, I am truly
grateful for the opportunity to testify today on the state of
the farm economy.
My name is Alisha Schwertner, and I am honored to speak
before you as a mother, a farmer, the 2022 chair of the
American Farm Bureau Federation's Young Farmers and Ranchers
Committee, and a Texas Farm Bureau member who serves on the
Runnels County board.
My husband and I are third generation farmers and ranchers
in Miles, Texas, where we grow cotton, corn silage, grain
sorghum, and hay. We also manage a small cow-calf herd and sell
beef directly to local consumers. Our primary motivation for
working hard to ensure the future of our operation, if they
choose it, are our four young boys, ages 6, 3, and 1. They are
why we do what we do. I know many others who share the same
passions and visions for their own operations in hopes that
their family legacy can continue.
Unfortunately, without change in the trajectory of the farm
economy, I worry many of us will fall short. Farming has never
been easy, but the past 3 years have been especially
challenging for farm and ranch families. Many of us have
experienced extreme and unpredictable weather disasters,
inflation, supply chain disruptions, and international
conflicts are also to blame for rising input costs that cut
into the already thin margins that we operate under. The farm
economy is at a crossroads.
For perspective, my husband's grandmother passed away 2
years ago, and we came across receipts and invoices from his
grandpa Schwertner while cleaning out her house. On these
receipts, Grandpa Schwertner sold his cotton for 63 per pound.
Just 2 weeks ago, we were quoted 58 per pound. That is 5 less
per pound than 60 years ago, yet in that same time, we have
seen application costs increase by more than 300 percent, and
machinery costs go up by nearly 600 percent. There are even new
costs, including the cost to purchase seed and crop insurance.
Unlike many other industries, farmers cannot pass increased
costs onto consumers for a higher return. We as farmers are
price takers, not price makers, and we are at the mercy of
increasingly volatile markets that are influenced by forces far
beyond our control. For example, a small business owner may
increase their costs to ship an item to a consumer if the
shipping prices increase. I cannot increase cotton prices to
cover an increase in storage or transportation costs.
USDA's most recent farm sector income forecast has shown a
$41 billion decrease in net farm income, down nearly 25 percent
from 2022. Since crop prices peaked in 2022, they have taken a
nosedive. Corn and wheat are down 37 percent, soybeans down 28
percent, and cotton down 22 percent. Despite these lower
prices, payments to farmers are projected to be the lowest
since 1982.
Another cause of the decline in farm income is failure to
secure additional trade deals for agriculture. We have
experienced 2 years of record agricultural trade deficits with
another one projected. Trade is vitally important to
agriculture, as more than 95 percent of the world's consumers
live outside of the United States, and nearly \1/3\ of U.S.
farm income comes from exports. The possibility of retaliatory
tariffs on our agricultural products could impact market
access, becoming detrimental to our bottom line.
As farmers and ranchers work to secure equity to continue
operating in 2025, the economic uncertainty has made it
difficult for bankers to extend credit. For the first time in
our tenure on our farm, we will not be able to pay our previous
year's operating line of credit in its entirety on its due
date. We are forced to have challenging conversations with our
banker regarding loan renewal, and ultimately paying the high
interest rates that come with it. We are constantly looking to
diversify our income while considering whether a future in
farming is realistic for our family. Our farm, and so many
others, will not endure these current economic conditions.
Farming is more than an occupation. It is a personal
commitment and a passion for feeding and sustaining our nation
and families. We love what we do, but without adequate policies
and support, we risk losing everything that we and past
generations have worked so hard for. This includes the ability
to pass on our legacy and profession to the next generation.
For us, that happens to be our four boys.
The economic and disaster assistance from the year-end
continuing resolution was certainly helpful and will provide
many farm and ranch families with the ability to continue
operating for another year. We are grateful this Committee
voted in a bipartisan manner to advance a modernized farm bill
last year. However, we still need Congress to take action and
agree on significant investments in farm safety net programs to
reflect current economic conditions, as well as long-term
solutions for rising input costs and volatile markets. Our food
system, rural communities, and our national security depend on
it.
Thank you for the opportunity to share these challenges,
and I look forward to your questions.
[The prepared statement of Ms. Schwertner follows:]
Prepared Statement of Alisha Schwertner, Owner, Eric and Alisha
Schwertner Farms, Miles, TX
Chairman Thompson, Ranking Member Craig, and Members of the House
Agriculture Committee, I am truly grateful for the opportunity to
testify today on the state of the farm economy.
My name is Alisha Schwertner, and I am honored to speak before you
as a mother, a farmer, the 2022 chair of the American Farm Bureau
Federation's Young Farmers & Ranchers Committee, and a Texas Farm
Bureau member who serves on the Runnels County board.
My husband and I are third-generation farmers and ranchers in
Miles, Texas, where we grow cotton, corn silage, grain sorghum, wheat,
and hay. We also manage a small cow-calf herd and sell beef directly to
local consumers. Our primary motivation for working hard to ensure the
future of our operation--if they choose it--are our four young boys,
ages 6 (twins), 3 and 1. They are why we do what we do. I know many
others who share the same passions and visions for their own
operations, in hopes that their family legacy can continue.
Unfortunately, without change in the trajectory of the farm economy, I
worry many of us will fall short.
Farming has never been easy, but the past 3 years have been
especially challenging for farm and ranch families. Many of us have
experienced extreme and unpredictable weather disasters. Inflation,
supply chain disruptions, and international conflicts are also to blame
for rising input costs that cut into the already thin margins that we
operate under. The farm economy is at a crossroads.
For perspective, my husband's grandmother passed away 2 years ago,
and we came across receipts and invoices from his Grandpa Schwertner
while cleaning out her house. On these receipts, Grandpa Schwertner
sold his cotton for 63 per pound. Just 2 weeks ago, we were quoted 58
per pound. That's 5 less per pound than 60 years ago. yet in that same
time, we have seen application costs increase by more than 300%, and
machinery costs go up by nearly 600%. There are even new costs
including the cost to purchase seed and crop insurance.
Unlike many other industries, farmers cannot pass increased costs
on to consumers for a higher return. We as farmers are ``price
takers'', not ``price makers'', and we are at the mercy of increasingly
volatile markets that are influenced by forces far beyond our control.
For example, a small business owner can increase their cost to ship an
item to a consumer if the shipping prices increase. I cannot increase
cotton prices to cover an increase in storage or transportation costs.
USDA's most recent Farm Sector Income Forecast has shown a $41
billion decrease in net farm income, down nearly 25% from 2022. Since
crop prices peaked in 2022, they have taken a nosedive.\1\ Corn and
wheat are down 37%, soybeans down 28% and cotton down 22%. Despite
these lower prices, payments to farmers are projected to be the lowest
since 1982.
---------------------------------------------------------------------------
\1\ https://www.usda.gov/oce/commodity/wasde/wasde1224v2.pdf.
---------------------------------------------------------------------------
Another cause of the decline in farm income is failure to secure
additional trade deals for agriculture. We have experienced 2 years of
record agricultural trade deficits with another one projected. Trade is
vitally important to agriculture as more than 95 percent of the world's
consumers live outside the United States and nearly \1/3\ of U.S. farm
income comes from exports. The possibility of retaliatory tariffs on
our agricultural products could impact market access, becoming
detrimental to our bottom line.
As farmers and ranchers work to secure equity to continue operating
in 2025, the economic uncertainty has made it difficult for bankers to
extend credit. For the first time in our tenure on our farm, we will
not be able to repay our previous years operating line of credit in its
entirety on its due date. We are forced to have challenging
conversations with our banker regarding loan renewal and ultimately
paying the high interest rates that come with it.
Our farm, and so many others, will not endure these current
conditions. According to USDA's Census of Agriculture, the number of
family farms has continued to shrink from nearly two million in 2017,
to just under 1.9 million in 2023. We are constantly evaluating our
options to diversify our income in order to not become a negative part
of this statistic. The reality is that we are often considering whether
a future in farming is realistic for our family.
Farming is more than an occupation. It is a personal commitment and
a passion for feeding and sustaining our nation and families. We love
what we do, but without adequate policies and support, we risk losing
everything we, and past generations, have worked for. This includes the
ability to pass on our legacy and profession to the next generation.
For us, that happens to be our four boys.
The economic and disaster assistance from the year-end Continuing
Resolution was helpful and will provide many farm and ranch families
with the ability to continue operating for another year. We are
grateful this Committee voted in a bipartisan manner to advance a
modernized farm bill last year. Unfortunately, there were no further
outcomes. We still need Congress to take action together and agree on
significant investments in farm safety net programs to reflect current
economic conditions as well as long term solutions for rising input
costs and volatile markets. Our food system, rural communities, and our
national security depend on it.
Thank you for the opportunity to share these challenges. I look
forward to your questions.
The Chairman. Thank you, Ms. Schwertner.
Mr. Talley, please begin when you are ready.
STATEMENT OF RYAN TALLEY, PARTNER, TALLEY FARMS,
ARROYO GRANDE, CA; ON BEHALF OF SPECIALTY CROP FARM BILL
ALLIANCE
Mr. Talley. Thank you, Chairman Thompson, Ranking Member
Craig, and Members of the Committee.
Although not directly under the jurisdiction of this
Committee, I cannot testify before Congress without first
emphasizing how vital it is to the security of our nation's
food supply and the future of the specialty crop production in
the United States for Congress to enact a bipartisan solution
to the workforce crisis in agriculture.
I am testifying today, however, on behalf of the Specialty
Crop Farm Bill Alliance, a coalition of nearly 200
organizations representing the entirety of the specialty crop
industry in the United States. We have come together to promote
common sense initiatives that Congress should include in the
next farm bill.
Let me begin by telling you a little bit about myself and
my family farm. My grandfather started Talley Farms in 1948,
which is located on the Central Coast of California, and it has
been in the family ever since that time. I began working on the
family farm during the summers at age 12, and have worked there
ever since. We recently welcomed the fourth generation of our
family to full-time positions on the farm.
While we are not the largest operation in our area, we are
certainly not the smallest. We produce a wide range of fruits
and vegetables on nearly 1,800 conventional acres, including
more than 30 different crops on 75 acres of certified organic
soil.
If I leave you here today with one thing, it is that
investing in specialty crops is a good value for the taxpayers'
money that will benefit all Americans. Our products account for
nearly half the farm-gate value in the United States, and the
dietary guidelines for Americans recommend that fruits and
vegetables should comprise at least half of Americans' diet.
Yet, under current law, specialty crops receive a small
fraction of their proportional share of the farm bill
resources.
The investments we are proposing are modest when compared
to programs for other commodities, and when you invest in
specialty crops, which include nutrient-dense fruits,
vegetables, and tree nuts, you are also investing in the long-
term health and security of the American people.
Specialty crops is a term that consists of different
commodities grown in different seasons and regions in all 50
states. Despite this diversity, the industry is confronted with
common challenges that hinder our ability to compete. Our input
costs are rising at an alarming rate, with labor comprising
nearly half of the cost of our production. We have increasingly
limited access to crop protection tools, with few replacements
under development. For those who export, we face great
uncertainty in foreign markets. In our domestic markets,
competition is rising from imports and significantly lower
production costs.
Hurricanes, drought, and other severe weather occur with
increasing frequency. Although USDA has dramatically improved
its ability to provide ad hoc assistance to our growers, we
need Congress to enact a comprehensive bipartisan bill that
invests in long-term competitiveness of our industry.
Our proposal for the farm bill includes new funding for
research and development, incentives for technology that
supplement and enhance human labor, resources to make our
operations more resilient to extreme weather, and common-sense
changes to the crop insurance that would provide the majority
of our growers with a functional safety net for the very first
time.
I don't have the time to walk through each of these
proposals in my testimony, but we have submitted written
testimony for record, which includes a copy of our 2023
recommendations. We will provide updated recommendations to you
in the coming weeks. The Alliance stands ready to work with
each of you on the next farm bill.
Thank you, and I look forward to answering any questions.
[The prepared statement of Mr. Talley follows:]
Prepared Statement of Ryan Talley, Partner, Talley Farms, Arroyo
Grande, CA; on Behalf of Specialty Crop Farm Bill Alliance
Thank you, Chairman Thompson, Ranking Member Craig, and Members of
the Committee.
Introduction
Although not directly under the jurisdiction of the Agriculture
Committee, I cannot testify before Congress without first emphasizing
how vital it is to the security of our nation's food supply, and the
future of specialty crop production in the United States, for Congress
to enact a bipartisan solution to the workforce crisis in agriculture.
Labor represents more than half the cost of producing many specialty
crops, and this continually escalating expense is untenable.
I am testifying today, however, on behalf of the Specialty Crop
Farm Bill Alliance. A coalition of nearly two hundred organizations
representing the entirety of the specialty crop industry in the United
States. We have come together to promote common sense initiatives that
Congress should include in the next farm bill.
Let me begin by telling you all a little about myself and my family
farm. My grandfather started our family farm in 1948, and it has been
in the family ever since. I began working on the family farm during the
summers at age 12 and have worked on the farm ever since. Recently we
welcomed the fourth generation to full-time positions working on the
family farm. Our farm is located on the Central Coast of California.
While we are not the largest family farm in our area, we are certainly
not the smallest. We produce a wide range of fruits and vegetables on
nearly 1,800 conventional acres, including more than 30 different items
on 75 acres of certified organic soil.
Investing in Specialty Crops Is Good Value for the Money
Members of this Committee, if I leave with you with one thing
today, it's that investing in specialty crops is good value for the
taxpayer's money that will benefit all Americans. On behalf of the Farm
Bill Alliance, I want to thank Chairman Thompson, the bipartisan
Committee staff, and Members from both sides of the aisle who
contributed to so many of our priorities being added to the Farm, Food,
and National Security Act of 2024.
As reflected in the Committee's work last Congress, farm bills
should invest more, not less in specialty crops. Our products account
for nearly half the farm gate value in the United States, and the
Dietary Guidelines for Americans recommend that fruits and vegetables
should comprise at least half of Americans' diets. Yet under current
law, specialty crops receive a small fraction of their proportional
share of farm bill resources. In fact, according to the nonpartisan
Congressional Research Service, the Horticulture title of the 2018 Farm
Bill accounted for only \1/2\ of one percent of its funding.
The investments we're proposing are modest when compared to
programs for other commodities, but they could be transformative for
our growers. When you invest more in specialty crops--which include
nutrient dense fruits, vegetables, and tree nuts--you are also
investing in the long-term health and security of the American people.
All of us who work in agriculture know that food security is national
security.
Common Challenges
Specialty crops is a term that consists of different commodities
and types of operations that are grown in different seasons and regions
in all fifty states. Despite the diversity of our operations, the
industry is confronted with common challenges that hinder our ability
to compete.
As with other commodities, our input costs are rising at an
alarming rate, and our greatest input cost is human labor. For most
specialty crops, human labor is a necessary component of nearly every
aspect of our operations. According to data from the Department of
Agriculture, the cost of labor has risen more than forty percent during
the last 4 years and is projected to continue to climb.
We have increasingly limited access to crop protection tools and
there are few replacements for them currently under development.
For those who export, we face great uncertainty in foreign markets.
In our domestic markets, competition is rising from imports with
significantly lower production-costs. The trade deficit is real and is
particularly acute for many specialty crops.
Our growers struggle to adjust to drought, hurricanes, wildfires,
and other natural disasters, and that's all on top of market
disruptions, such as those to our supply chains during the pandemic.
Ad Hoc Economic Assistance
Because specialty crops are so diverse and their operations and
markets are different than other commodities, USDA has at times
struggled to deliver direct economic assistance to our growers when the
need has arisen, but that's been changing in recent years.
The Trump Administration worked with the specialty crop industry
during COVID to understand why prior initiatives--including natural
disaster assistance, the trade-related Market Facilitation Program, and
Coronavirus Food Assistance Program--weren't working for our growers.
This dialogue ultimately resulted in the Trump Administration's highly
successful implementation of CFAP 2.
CFAP 2 was the basis for USDA's most recent iteration of direct
assistance to specialty crop growers, prompted in-part by the
bipartisan leadership of this Committee when Congress extended the
current farm bill at the end of 2024. Working with industry and the
staff of the House and Senate Agriculture Committees, USDA built on its
experience across Administrations to quickly and effectively deliver
this vital economic assistance to our growers.
No matter the reason for providing specialty crop growers with
direct economic assistance, it is the delivery mechanism that USDA is
finally going right. We would like to highlight some of the key
components that helped provide meaningful assistance directly to our
growers and that should be included in any future effort initiated by
Congress or USDA, including--
1. A unique payment limit for specialty crops of $900,000,
recognizing the higher value of our crops and the
significant input costs required to grow them.
2. Calculating payments on an individual grower's actual sales from
a choice of base years, recognizing that each specialty
crop has its own unique market and sales practices and
confronts different challenges during different seasons and
years.
3. Self-attestation in lieu of burdensome paperwork and red tape.
4. No AGI limitations if 75% of a grower's income is derived from
farming.
Although we are grateful for these payments, those short-term
programs are but a band-aid. What we need is a comprehensive,
bipartisan farm bill that invests in the long-term competitiveness of
our domestic specialty crop industry.
Farm Bill
The Alliance is proposing targeted new investments and a suite of
innovative tools to support the entire specialty crop industry,
including: new funding for research and development for every aspect of
our operations (including developing the next generation of crop
protection tools), incentives for technologies to supplement and
enhance human labor, technical assistance and resources to help our
operations become more resilient to extreme weather, and common sense
changes to crop insurance that would provide the majority of our
growers with a functional safety net for the very first time. We are
also proposing needed reforms to Federal procurement rules that would
increase the availability in Federal programs of the nutritious foods
our growers produce and that Americans should be consuming in greater
quantities.
The appendix attached to this testimony includes the 2023 Specialty
Crop Farm Bill Alliance Recommendations \1\ which were approved in
January of that year. The Alliance is in the process of updating these
recommendations for the new Congress, and we plan to provide those to
you in the coming weeks. Although the new recommendations will be
substantially similar to the ones we are providing today, necessary
alterations are being made to reflect lessons learned and changed
circumstances over the last 2 years.
---------------------------------------------------------------------------
\1\ https://farmbillalliance.com/priorities/.
Editor's note: there is no attached appendix with the submitted
testimony, however, the website referenced does have the January 30,
2023 (posted as per the hyperlink May 2023) Steering Committee
Recommendations. A website snapshot and the January 30, 2023 Steering
Committee Recommendations follow Mr. Talley's statement.
---------------------------------------------------------------------------
One such area is crop insurance. Although crop insurance is popular
with a limited number of our growers who have been fortunate enough to
have access to it, the reality is that crop insurance is simply not
available to most specialty crop growers today. Although our original
2023 recommendations included some proposals on crop insurance, with
the encouragement of the staff from both the House and Senate
Agriculture Committees, the Alliance engaged in a more comprehensive
review of what could be done to provide an affordable and effective
safety net that would work for the majority our growers.
In the summer of 2023, the Alliance circulated two concept papers
and solicited feedback from key stakeholders, including USDA's Risk
Management Agency, Members of the House and Senate Agriculture
Committees, crop insurance agents, academics, actuaries, and a wide
variety of specialty crop growers. It became clear through the course
of these interactions that the specialty crop industry in the United
States needs an affordable, adaptable, and effective safety net, and
that changes to the current crop insurance system need to be made.
The lessons we learned during that process have been influencing
our 2025 recommendations, which will include comprehensive proposals to
modernize the Whole Farm Revenue Insurance Program, provide certainty
regarding what the perils revenue insurance policies actually cover,
and establish a private sector led advisory committee to supplement the
expertise of the Risk Management Agency and provide the specialty crop
industry with a formal role and voice in the process. If enacted, these
commonsense reforms should provide specialty crop growers with an
adaptable, affordable, and effective safety net to protect them against
a wide range of perils. In other words, there'd be a real safety net
available to most specialty crop growers for the first time.
Closing
We need Congress to enact a comprehensive bipartisan farm bill as
soon as possible. The Alliance stands ready to work with each of you on
the next farm bill, and I look forward to answering your questions.
[Appendix]
website snapshot
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[https://farmbillalliance.com/priorities/]
2023 Farm Bill Priorities
Specialty crops are a critical component of the overall U.S.
agriculture economy. The production of fruits, vegetables, tree nuts,
nursery and greenhouse commodities accounts for $64.7 billion in farm
gate value and 30 percent of farm cash receipts for crops.
The SCFBA's 2023 Farm Bill recommendations represent the most
comprehensive set of ideas from the coalition to date, including 109
specific recommendations covering eight farm bill titles.
View the 2023 SCFBA Recommendations \1\
---------------------------------------------------------------------------
\1\ https://farmbillalliance.com/wp-content/uploads/2023/05/23-
SCFBA-Steering-Committee-Recommendations-v2.pdf
---------------------------------------------------------------------------
The recommendations prioritize a set of core principles:
Healthy Americans: Expanding access and availability to
safe, wholesome, healthy and affordable foods, as well as
trees, flowers and plants, will encourage lifelong healthy
eating habits, mental and physical well-being, and help address
national priorities such as obesity, heart disease, and food
and nutrition insecurity.
Competitiveness and Sustainability: In recognition of its
significance to American agriculture, the American food supply,
and the communities it supports across the United States, a
proportional share of farm bill resources and mandatory
spending should be allocated to specialty crop priorities.
Trade and Foreign Competition: Establishing a competitive
playing field for American specialty crop producers includes
assisting American producers with unfair foreign competition,
promoting American specialty crops in foreign markets and
eliminating trade barriers that discriminate against American
specialty crop exports.
Research and Innovation: A sustained federal investment into
research and innovation must be of a meaningful scale to
catalyze opportunities for the industry, alleviate existing
challenges and propel the U.S. specialty crop industry to a new
level of global competitiveness.
Natural Resources and Climate: Recognizing the diverse
nature and unique challenges involved in specialty crop
production enhances the ability of specialty crop producers to
participate fully in all USDA conservation programs as well as
any initiatives to address global climate change.
[report]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
2023 Farm Bill Final Policy Recommendations
January 30, 2023
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Overview
The specialty crop industry is united to advocate for a common set
of priorities in the 2023 Farm Bill. A broad coalition of specialty
crop organizations, known as the Specialty Crop Farm Bill Alliance
(SCFBA), representing U.S. growers and shippers, has been working to
forge mutual objectives for the farm bill, to assure a common platform
across regions, commodities and other interests. The SCFBA will work
closely and collaboratively with allies in all specialty crops who
share many of the following priorities, as well as other stakeholders
across U.S. agriculture. Included in this document is our statement of
principles along with detail policy recommendations covering eight farm
bill titles.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
SCFBA Statement of Principles for Consideration of the 2023 Farm Bill
Healthy Americans. Investments in the competitiveness and
sustainability of the U.S. specialty crop industry will produce a
strong return for all Americans, not just farmers. Expanding access and
availability to safe, wholesome, healthy, and affordable foods, as well
as trees, flowers, and plants, will encourage life-long healthy eating
habits, mental and physical well-being, and help address national
priorities such as obesity, heart disease, and food and nutrition
insecurity.
Competitiveness and Sustainability. In recognition of its
significance to American agriculture, the American food supply, and the
communities it supports across the United States, a proportional share
of farm bill resources and mandatory spending should be allocated to
specialty crop priorities. To foster a better understanding of the
specialty crop industry in the United States, Congress and USDA should
invest in the human resources, expertise, and data collection and
analytics necessary throughout the government to better serve this
diverse and vital agricultural sector and its supply chains.
Trade and Foreign Competition. Preserving the critical supply chain
for domestically sourced healthy foods in the United States should be a
national priority. Establishing a competitive playing field for
American specialty crop producers includes assisting American producers
with unfair foreign competition, promoting American specialty crops in
foreign markets, and eliminating trade barriers that discriminate
against American specialty crop exports.
Research and Innovation. Scientific breakthroughs, technological
innovation and data-enabled decision-making will continue to drive
long-term sustainability and profitability of the specialty crop
industry as it adapts to labor, climate and environmental challenges,
pests and diseases, rising global competitiveness, shifting consumer
preferences, supply chain disruptions, and other challenges. A
sustained federal investment into research and innovation must be of a
meaningful scale to catalyze opportunities for the industry, alleviate
existing challenges, and propel the U.S. specialty crop industry to a
new level of global competitiveness.
Natural Resources and Climate. The production methods and structure
of certain specialty crop producers have historically inhibited their
ability to participate in many USDA conservation programs. Recognizing
the diverse nature and unique challenges involved in specialty crop
production enhances the ability of specialty crop producers to
participate fully in all USDA conservation programs as well as any
initiatives to address global climate change.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Title I Commodity Program
Adjusted Gross Income (AGI) and Payment Limits
Specialty crop producers face unique challenges with the
application of Adjusted Gross Income (AGI) limitations compared to
other commodity crop producers for most farm bill programs. The current
implementation of AGI limitations disproportionately prohibits
specialty crop producers from participating in certain USDA programs in
a meaningful way and potentially inhibits specialty crop producers from
participating in disaster programs.
Although a means test may be appropriate for participation in many
USDA programs, AGI is an ill-suited means test for specialty crop
producers. USDA programs that require a means test for participation
should be based on income derived from farming and be flexible enough
to account for the structures, accounting methods and other special
considerations for specialty crop producers, not just their AGI.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
Conservation programs incentivize production practices to the
broader benefit of society and should, therefore, not be subject to
any AGI limitations.
Congress should require USDA to conduct a rulemaking within
180 days of enactment to establish unique rules to means test
specialty crop producers that would ensure a more equitable outcome
for specialty crops while maintaining the original intent behind the
AGI limitation. The rule should consider the following factors:
1. Attribution of Payments. Specialty crop producers structure their
operations for a variety of reasons unrelated to USDA programs
which inadvertently block their participation in many USDA
programs.
2. Capital Expenditures. Many specialty crop producers face
significant up-front capital expenditures at a time in their
operations when their income is low. Therefore, their capital
expenditures are not reflected consistently year-over-year in their
AGI calculations.
3. Geography and cost of living in the communities where specialty
crop producers operate tend to be disproportionately greater than
other agricultural operations.
4. Such other considerations as determined by the Secretary.
If AGI continues to be utilized as a means test for specialty
crop producers, it should revert to the 2002 Farm Bill model, which
was also used for the Coronavirus Food Assistance Program (CFAP). If
75% or 90% of income is derived from farming, then no AGI limitation
should be applied.
------------------------------------------------------------------------
Tree Assistance Program (TAP)
The Tree Assistance Program (TAP) provides financial assistance to
eligible orchardists and nursery tree growers to replant or
rehabilitate eligible trees, bushes, and vines lost by natural
disasters. TAP is administered by the Farm Service Agency (FSA) of the
U.S. Department of Agriculture (USDA). Eligible trees, bushes, and
vines are those from which an annual crop is produced for commercial
purposes. Nursery trees include ornamental, fruit, nut and Christmas
trees produced for commercial sale. Trees used for pulp or timber are
not eligible for TAP assistance.
The Bipartisan Budget Act of 2018 made several changes to TAP,
including removing the per person and legal entity program year payment
limitation ceiling of $125,000. It also increased the acreage cap, and
growers are eligible to be partly reimbursed for losses on up to 1,000
acres per program year, double the previous acreage. The 2018 Farm Bill
increased the reimbursement amount for applicants who meet the
definition of a beginning or veteran farmer or rancher.
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Policy Recommendations
Eliminate the 15% mortality threshold for assistance and
bring the program in line with the livestock indemnity program.
Congress should require USDA to increase coverage levels in
addition to covering rehabilitation.
Congress should provide additional flexibility for completing
TAP-funded rehabilitation by extending the period of time from the
existing 12 months to 12 months or as soon thereafter as is indicated
to avoid risk of reinfection in the case of plant diseases.
Cumulative total quantity of acres that can receive TAP
payments for eligible participants may not exceed 1,000 acres
annually. Congress should provide USDA with the authority to modify
or waive the annual acreage cap under exigent circumstances, such as
a natural disaster.
Eliminate the Adjusted Gross Income and Payment Attribution
limitations.
Reset high-density stand after loss. TAP only permits
producers to reset to their original amount and not the updated high-
density planting that they put in after the original planting that
TAP is based on. Producers need the ability to update stand to high-
density planting after loss.
The definition of ``eligible orchardists'' should be amended
to state, ``a person who produces annual or biennial crops from trees
[as defined in bill] for commercial purposes.''
Rules should be adjusted to account for perennial crop plants
with biennial production cycles, and reimbursable costs should be
broadly defined to account for any costs incurred in the process of
reestablishing, rehabilitating, and/or nurturing plants suffering
from natural disasters back to a productive condition.
------------------------------------------------------------------------
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Title II Conservation
Soil Conservation
Congress created the Soil Conservation Service in 1935 to prevent
soil erosion associated with the Dust Bowl of the 1930s. Recognizing an
evolved and broadened scope, Congress changed the name to the Natural
Resources Conservation Service in 1994. In practical terms, the purpose
of this agency, then and now, is to prevent the next Dust Bowl. Climate
change is here, and impacts the economic sustainability of farming,
just as the Dust Bowl did in the thirties. It is the role of the NRCS
to help U.S. agriculture adapt to climate change--to ensure the
economic sustainability of farming in the US in a changing climate.
Heat impacts of climate pose a major adaptation risk for growers.
------------------------------------------------------------------------
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Policy Recommendations
NRCS should recognize ``Climate Change Induced Risk'' as a
Resource Concern, and that NRCS Practices through EQIP (e.g., 430,
436, 441, 442, 449, 533, 642) that help producers adapt to climate
change should be implemented in such a way to help address that
resource concern.
NRCS Practices used to address the new ``Climate Change
Induced Risk'' Resource Concern should be cost-shared at the maximum
allowable rate to incentivize the participation of producers with
limited capital.
NRCS Standards and Specifications for sustainable irrigation
practices should allow for flexibility in meeting the standard to
mitigate producers' risk of having to pay 100% of the cost, for
example, of an unsuccessful well-drilling project.
Establish a pilot program to allocate $10 million per year to
states to supplement NRCS sustainable irrigation funding, further
reducing financial exposure to producers and encouraging climate
change adaptation. (Note: Tennessee and California have State
irrigation programs that work in concert with NRCS that should serve
as a model for other states to utilize these funds for these climate-
related purposes.)
Due to the excessive cost of sustainable irrigation, any
practices implemented to address the resource concern of ``Climate
Change Induced Risk'' should not count towards EQIP's $450,000
producer cap per farm bill.
NRCS sustainable irrigation practices implemented through AMA
should be cost-shared at the maximum allowable rate to encourage
climate change adaptation.
NRCS should increase the annual per practice cap allowable
through the AMA program from $50,000 to $100,000.
------------------------------------------------------------------------
Note: NRCS irrigation practices implemented to address a
``Climate Change Induced Risk'' Resource Concern should not
pose a significant risk of depletion to state and regional
water resources.
NRCS Paperwork Burden
Producers find excessive paperwork a barrier to participation in
NRCS programs. In addition, a significant amount of that time and
effort is spent on filing and paying tax on NRCS cost-share amounts,
which are taxable under current law. In the last two farm bills,
efforts were made to reduce the paperwork burden on producers. While
physical paper seems to have been reduced, the paperwork has been
replaced by numerous electronic screens.
------------------------------------------------------------------------
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Policy Recommendations
NRCS cost-share payments should not be taxable, which would
incentivize more engagement.
Allow trade associations representing producers to undertake
the paperwork functions (electronic screens) for their producers on a
watershed or regional project basis.
------------------------------------------------------------------------
EPA Pesticide Mitigation Plans and Specialty Crops
EPA has been repeatedly sued for not meeting its Endangered Species
Act (ESA) obligations when registering pesticides under FIFRA. The
Biological Evaluation (BE) and Biological Opinion (BiOp) process
through EPA and the Services takes an exceptionally long time and are
complex and the process does not appear to be keeping new and re-
registrations. To strengthen their legal standing, EPA is pursuing an
expedited species assessment called a ``jeopardy or adverse
modification'' (JAM) to determine if and what mitigations will be
necessary to use a registered pesticide while being protective species.
It is likely this will be a preferred approach with all new and
existing products that are being registered and reregistered.
EPA mitigations mirror many practices offered by USDA-NRCS through
EQIP geographies with a higher concentration of endangered species and
critical habitats that will have greater challenges in accessing tools
and will disproportionally impact specialty crops.
Specialty Crops should anticipate mitigations to be a regular
component of pesticide labels moving forward. In addition, endangered
species are concentrated in regions of the United States where over
half of all specialty crops are produced. Implementation of these
mitigations could be expensive, but without them, growers could lose
important pest management tools.
------------------------------------------------------------------------
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Policy Recommendations
Allow EQIP, or similar programs like the Regional
Conservation Partnership Program, the Conservation Stewardship
Program, or the Agricultural Conservation Easement Program, to
support specialty crop input management practices and mitigation
methods without regard to AGI limitations and in concert with ESA
obligations when registering pesticides under FIFRA.
Create eligibility language that focuses on watersheds with
the highest species concerns or limits the program to farmers who
will have multiple species of concern impacted.
Consider establishing a registrant/USDA cost-share program.
------------------------------------------------------------------------
Climate Change in Conservation Programs
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
Conservation programs should remain voluntary, and climate
change should not be used to mandate conservation production
practices.
Efforts to make conservation programs more climate-friendly
should not limit programs to a sole focus on `carbon' enhancing
practices. Conservation programs should be multi-resource focused
even if climate is the issue of concern.
------------------------------------------------------------------------
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Title III Agriculture Trade and Food Assistance Program
Increasing the competitiveness of the U.S. specialty crop industry
is a founding principle of the SCFBA. U.S. specialty crop growers
adhere to strict U.S. regulatory requirements and private standards
designed to protect the environment, provide consumers nutritious and
healthy food, and safeguard workers. Maintaining these high U.S.
standards is extremely costly. In addition, U.S. specialty crop
producers pay some of the highest agricultural labor costs in the
world. However, these investments are undermined globally when our
competitors do not have the same level of regulatory compliance costs
along with significantly lower costs of production. Farm bill programs
must recognize this imbalance and provide non-distorting support in the
areas of market development, research, innovation, and technology. This
support should assist specialty crop producers to maintain
competitiveness, offset the cost of production advantages in other
countries, and ensure the continued existence of domestic food
production.
Market Access Program (MAP)
Through the Market Access Program (MAP), FAS partners with U.S.
agricultural trade associations, cooperatives, state regional trade
groups and small businesses to share the costs of overseas marketing
and promotional activities that help build commercial export markets
for U.S. agricultural products and commodities.
MAP reaches virtually every corner of the globe, helping build
markets for a wide variety of U.S. farm and food products. FAS provides
cost-share assistance to eligible U.S. organizations for activities
such as consumer advertising, public relations, point-of-sale
demonstrations, participation in trade fairs and exhibits, market
research, and technical assistance. When MAP funds are used for generic
marketing and promotion, participants must contribute a minimum ten
percent match. For the promotion of branded products, a dollar-for-
dollar match is required.
Members of the SCFBA receive 25-30% of MAP funding allocated by the
U.S. Department of Agriculture, with the remaining 70-75% going to non-
specialty crops. Each year, more than 37 specialty crop organizations
from around the country receive more than $50 million of the $200
million currently from this oversubscribed market development program.
------------------------------------------------------------------------
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Policy Recommendation
The SCFBA supports the doubling of funding for the Market
Access Program (MAP) from $200 million to $400 million under the next
farm bill. MAP has been at the same funding level since 2006, and
since that time, fully \1/3\ of MAP funding has been lost to
sequestration and inflationary pressures. Compounding the problem is
the loss of U.S. market share due to retaliatory tariffs, port
congestion, and other supply chain dysfunction.
------------------------------------------------------------------------
Technical Assistance for Specialty Crops (TASC)
The Technical Assistance for Specialty Crops (TASC) program funds
projects that address sanitary, phytosanitary, and technical barriers
that prohibit or threaten the export of U.S. specialty crops. Eligible
activities include seminars and workshops, study tours, field surveys,
pest and disease research, and pre-clearance programs. Eligible crops
include all cultivated plants and their products produced in the United
States except wheat, feed grains, oilseeds, cotton, rice, peanuts,
sugar, and tobacco. Awards are for a maximum of $500,000 per year and
for projects of up to five years.
The TASC program is intended to benefit an entire industry or
commodity rather than a specific company or brand. U.S. nonprofit, for-
profit, and government entities are eligible to apply. Proposals may
target individual countries or reasonable regional groupings of
countries.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
The SCFBA supports the continuation of this program at $9
million annually. It is important, however, that the funds be used
exclusively for specialty crops as they were originally defined in
the Specialty Crop Competitiveness Act of 2004 and understood in the
current authorizing language. Due to improvements in the program made
in the 2018 Farm Bill and recommended by the SCFBA, TASC is now fully
utilized. However, since that time, additional commodities have been
granted access to TASC. Allowing non-specialty crops access to the
program has a negative impact on actual specialty crop producers. The
SCFBA maintains that non-specialty crops should not be eligible for
TASC.
------------------------------------------------------------------------
International Maximum Residue Limits (MRL) Database
The MRL database contains maximum acceptable levels of pesticides
and veterinary drugs in food and agricultural products in the United
States, as well as 70 other countries, the European Union and the Codex
Alimentarius Commission. Specifically, the database includes more than
300 fruit, vegetable and nut commodities, as well as more than 270
pesticides approved for use on those commodities by the U.S.
Environmental Protection Agency.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
The MRL Database is critical to maintaining trade markets for
all commodities and must have secure funding.
------------------------------------------------------------------------
Specialty Crop Competitiveness
Exports play a critical role in maintaining the competitiveness of
those specialty crop sectors that are fortunate to produce more than
can be consumed in the U.S. For those export-dependent commodities, the
USDA Foreign Agricultural Service (FAS) and the Animal and Plant Health
Inspection Service (APHIS) are critical to advancing the foreign market
competitiveness of U.S. growers, as is the Office of the U.S. Trade
Representative. It is these government agencies and their professional
staff that represent the interests of U.S. growers, open markets and
defend that access internationally. It is critical that USDA and USTR
prioritize the competitiveness of U.S. specialty crop growers and that
Congress utilize its oversight role to reinforce that mandate.
------------------------------------------------------------------------
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Policy Recommendation
Congress should require USDA and USTR to issue a report on
the export competitiveness of specialty crops. In this report,
special emphasis should be placed on those barriers to trade that
limit the export competitiveness in specific markets and what steps
USDA and USTR will take in cooperation with specialty crop producers
to successfully remove those barriers to trade, including timelines
for action. A special call for comment, both public and from the
Agricultural Trade Advisory Committee for Trade in Fruits and
Vegetables, should be a condition of the report.
------------------------------------------------------------------------
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Title IV Nutrition Programs
Nine in ten Americans do not consume fruits and vegetables in the
amounts recommended by the Dietary Guidelines for Americans (DGA).
Structuring farm bill nutrition programs to address the under-
consumption of DGA recommendations can both support the nutrition needs
of Americans and improve market opportunities for specialty crops.
Procurement Programs
USDA has a series of direct purchasing programs that aim to support
market prices in and out of emergencies and provide domestically grown
fruits and vegetables to food banks, schools and childcare centers,
tribal governments, and other feeding sites. These programs include
section 32, the Food Purchase and Distribution Program (FPDP), the USDA
DOD Fresh Fruit and Vegetable Program and USDA Foods (which provides
food to the Emergency Feeding Assistance Program (TEFAP), the Food
Distribution Program for Indian Reservations (FDIPR), the Commodity
Supplemental Food Program, and some schools and childcare centers).
USDA also implemented the Farmers to Families Program from 2020-2021.
------------------------------------------------------------------------
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Policy Recommendations
Because of the highly perishable nature of fresh fruits and
vegetables, many existing USDA procurement programs are not inclusive
of a wide range of fruits and vegetables. There are programs, like
USDA DOD Fresh, which effectively utilize the commercial supply chain
for distribution. This model, or one similar, should be considered as
a tool to improve access to fresh fruits and vegetables in federal
nutrition programs.
In general, USDA purchasing programs should support grower
resiliency, ensure recipients have access to a wide variety of
specialty crops consistent with the Dietary Guidelines for Americans
(DGA), and proactively address DGA shortfalls.
For all of USDA's nutrition procurement programs, Congress
should direct USDA to:
1. Conduct Solicitations using factors other than lowest-cost bid in
solicitations, including best value trade-off and cost-plus.
2. Purchase a greater amount and wider variety of specialty crops to
address the under-consumption of fruits, vegetables and tree nuts
as recognized by the Center for Disease Control (CDC) and cited in
the DGA.
3. Streamline barriers for vendors including, but not limited to,
inspection at shipping and accepting food safety certifications
beyond USDA Good Agricultural Practices (GAP).
4. Extend USDA food distribution programs to reputable nonprofits
beyond the TEFAP system to ensure that hard-to-reach areas,
including rural areas, have access to nutritious foods, including
fruits, vegetables, and tree nuts.
5. USDA has broad authority to make purchases under Section 32,
which has been underutilized, and USDA should conduct Section 32
purchases using all three original points of intent, consistent
with current U.S. international trade policy: (1) encouraging the
export of farm products through producer payments or other means;
(2) encouraging the domestic consumption of farm products by
diverting surpluses from normal channels or increasing their use by
low-income groups; and (3) re-establishing farmers' purchasing
power.
------------------------------------------------------------------------
The Supplemental Nutrition Assistance Program (SNAP)
SNAP is the largest federal government program to address food and
nutrition insecurity in our country and presents a significant
opportunity to improve dietary quality for low-income Americans. USDA
research shows that SNAP recipients must allocate 40 percent of their
SNAP benefit to fruits and vegetables to meet DGA targets. Yet,
American households allocate, on average, 26 percent of their food
budget to fruits and vegetables, with levels significantly lower for
low-income and SNAP households.
To date, the Gus Schumacher Nutrition Incentive Program (GusNIP) is
the only dedicated program to increase SNAP participants' buying power
of fruits and vegetables, including Produce Prescriptions. First
included in the 2014 Farm Bill to test whether providing incentives to
SNAP beneficiaries increased fruit and vegetable purchases and
consumption, GusNIP has been successful in proving that when provided
the dedicated resources, fruit and vegetable consumption does increase
among low-income consumers.
Historically, low-income consumers have disproportionately been
marketed foods of low dietary quality. Since the last farm bill, online
grocery redemption has grown significantly, including within SNAP. This
has positively impacted SNAP participation and presents an opportunity
to better promote fruit and vegetable consumption and reduce the
marketing of foods that are inconsistent with DGA recommendations.
The SCFBA believes all SNAP participants should have convenient
access to a wide variety of fruits and vegetables consistent with the
DGA recommendations.
------------------------------------------------------------------------
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Policy Recommendations
Congress should continue to invest in the GusNIP program,
which pilots strategies to improve access to and consumption of
fruits and vegetables, including Produce Prescriptions. Further
investments are needed to create a dedicated fruit and vegetable
benefit for SNAP participants modeled after the successful cash value
benefit (CVB) in the WIC program. Operating as a fixed dollar amount
set by the National Academy of Sciences, participants can select the
fruit and vegetable of their choice, proving to be a flexible option
across diverse cultures, seasons, and supply chain disruptions.
Congress should direct USDA to explore innovative ways to
promote consumption of fruits, vegetables, and tree nuts through
online retail, including the integration with existing programs like
GusNIP and SNAP-Ed.
------------------------------------------------------------------------
Buy American Requirements
Congress reauthorized the National School Lunch Act in 1968,
defining the intent of the legislation as: ``to safeguard the health
and well-being of the Nation's children'' and ``to encourage the
domestic consumption of nutritious agricultural commodities and other
food.'' In 1988, as part of the William F. Goodling Child Nutrition
Reauthorization Act, Congress reinforced its commitment to American
agriculture by adding a provision requiring school food authorities
(SFAs) to purchase domestic commodities or products.
USDA provides two limited exceptions to the Buy American
requirement: (1) a product is not produced or manufactured in the U.S.
in sufficient and reasonable available quantities of a satisfactory
quality, or (2) competitive bids reveal the costs of a U.S. product are
significantly higher than the foreign product.
Despite these Buy American requirements, non-compliant imported
products still reach schools, with the most frequent violations
occurring with processed foods. While we recognize that noncompliance
at the school level is often unintentional, violations hurt American
growers and more should be done by USDA to ensure that schools and
distributors comply with the Buy American provision.
------------------------------------------------------------------------
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Policy Recommendations
Congress should strengthen, and require USDA to enforce, the
Buy American requirements in USDA school meals programs.
Congress should specifically define that a U.S. product must
be at least 25% greater in cost to qualify as having a
``significantly higher cost'' than a foreign product.
------------------------------------------------------------------------
Fresh Fruit and Vegetable Program
The Fresh Fruit and Vegetable Program (FFVP) was originally piloted
in the 2002 Farm Bill and quickly expanded to all states and
territories due to its success and popularity. A USDA evaluation found
that FFVP increases consumption among low-income students, helps reduce
plate waste at school meals, and, most notably, can reduce obesity
rates by three percent. The program is oversubscribed, with many more
districts (all low-income) applying each year than funding made
available.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Congress should make FFVP automatically available to any
elementary school that currently qualifies as low-income under the
Community Eligibility Provision (CEP).
------------------------------------------------------------------------
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Title VI Rural Development
Eligibility for Rural Programs
The nature of growing and handling perishable goods means a
significant amount of specialty crop production and processing
operations are in areas that exceed `rural population' limits for
communities eligible to access USDA programs. These urban, suburban,
and ex-urban agriculture-based operations experience similar challenges
to rural farms and facilities.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
To ensure equitable access to USDA programs for all
agricultural products and supporting businesses and services,
specialty crop operations should be exempt from ``rural population''
caps.
------------------------------------------------------------------------
Rural Business Programs
USDA's Rural Business Programs provide financial backing and
technical assistance to stimulate business creation and growth. The
programs work through partnerships with public and private community
based organizations and financial institutions to provide financial
assistance, business development, and technical assistance to rural
businesses. These programs help to provide capital, equipment, space,
job training, and entrepreneurial skills that can help to start and/or
grow a business. As we look at these types of programs it is clear that
specialty crop businesses contribute tremendous value to local
agricultural economies.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Congress should reform Rural Business--Cooperative Service
(RBCS) loan and grant programs to remove current barriers to
specialty crop producer eligibility and fair access in such areas as
population limitations and capitalization barriers.
------------------------------------------------------------------------
Value-Added Agricultural Market Development Program Grants
The Value-Added Producer Grant (VAPG) Program is a competitive
grants program administered by the Rural Business Cooperative Service
at USDA to help producers move into value-added agricultural
enterprises. The term ``value-added'' refers to an agricultural
commodity or product that has changed physically or was produced,
marketed or segregated in a manner that enhances its value or expands
its customer base.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Congress should reauthorize and continue to fund the Value-
Added Produce Grant Program.
------------------------------------------------------------------------
Rural & Agricultural Housing Programs--Generally
USDA's Rural Housing Service offers a variety of programs to build
or improve housing and essential community facilities in rural areas.
They offer loans, grants and loan guarantees for single- and
multifamily housing, childcare centers, fire and police stations,
hospitals, libraries, nursing homes, schools, first responder vehicles
and equipment, housing for farm laborers and much more.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
USDA has several programs that producers can access to help
pay for the construction or the rental of farm worker housing both on
and off the farm as well as help farmworkers pay for rent. Congress
should use the farm bill to enhance programs that help producers with
costs with respect to the housing of agricultural workers.
------------------------------------------------------------------------
Off-farm Labor Housing Loans and Grants
Construction, improvement, repair, and purchase of housing for
domestic farm laborers is the primary objective of this program. H-2A
workers are not eligible under the law as it states that tenant
eligibility is limited to ``domestic farm laborer,'' ``retired domestic
farm laborer'' or a ``disabled farm laborer'' and the domestic farm
laborer is defined to only include a citizen of the United States or a
legal permanent resident residing in the US, Puerto Rico, or the Virgin
Islands. Moreover, temporary workers must have their employer provide
their housing, but they cannot add their name to a first-come, first-
served list of potential tenants and hope there will be an opening when
needed.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Congress should prioritize off-farm housing, including all
work-authorized residents, including temporary workers (H-2A, etc.).
Congress should direct the Rural Housing Service to change its
policies on leasing to allow employers to reserve space for arriving
workers (also known as block leasing).
------------------------------------------------------------------------
On Farm Housing Labor Loans
This program provides low interest loans to eligible borrowers to
develop or rehabilitate affordable rental housing for very-low-income
domestic, migrant, and seasonal farm laborers. Borrowers must not
otherwise be able to get commercial credit, but there is a waiver for
housing domestic labor, and no local or state agency is willing to
provide the housing.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
Congress should increase funding for these programs.
Expand eligibility for all Off-Farm Labor Housing Loans and
Grants to ``include persons who are legally admitted in this country
and authorized to perform work in agriculture in the definition of
domestic farm laborer. This revision applies even if the admittance
to this country is temporary.''
------------------------------------------------------------------------
Multifamily Housing Rental Assistance
This program provides payments to owners of USDA-financed Rural
Rental Housing or Farm Labor Housing projects on behalf of low-income
tenants unable to pay their full rent.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Congress should increase funding to this program targeted
toward farm worker tenants.
------------------------------------------------------------------------
Rural Utilities and Community Facilities Programs
USDA grant and loan programs for community facilities and water
treatment provide valuable resources to rural communities that often
lack adequate water resources and facilities vital for the operation of
specialty crop operations. Without access to these funds, which
supplement local resources, it is often impossible for specialty crop
operations to be viable in the communities which they call home.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Community projects that supply water essential to specialty
crop operations in all areas of the country should be eligible for
funds made available by USDA rural development and rural utilities
programs.
------------------------------------------------------------------------
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Title VII Research
Advancing research and development activities to overcome existing
and upcoming research challenges in specialty crop agriculture will
require acceleration of novel, early-stage innovative agricultural
research with promising technology applications and products. Below
represents the SCFBA focus for research in the 2023 Farm Bill.
Specialty Crop Research Initiative (SCRI)
The Purpose of the Specialty Crop Research Initiative (SCRI)
program is to address the critical needs of the specialty crop industry
by awarding grants to support research and extension that address key
challenges of national, regional, and multi-state importance in
sustaining all components of food and agriculture, including
conventional and organic food production systems. Projects must address
at least one of five focus areas:
1. Research in plant breeding, genetics, genomics, and other methods
to improve crop characteristics.
2. Efforts to identify and address threats from pests and diseases,
including threats to specialty crop pollinators.
3. Efforts to improve production efficiency, handling and
processing, productivity, and profitability over the long
term (including specialty crop policy and marketing).
4. New innovations and technology, including improved mechanization
and technologies that delay or inhibit ripening.
5. Methods to prevent, detect, monitor, control, and respond to
potential food safety hazards in the production efficiency,
handling, and processing of specialty crops.
------------------------------------------------------------------------
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Policy Recommendations
Congress should allocate an additional $50 million in annual
mandatory spending to SCRI.
Congress should maintain a flexible governance structure for
SCRI, as specialty crop challenges 5 years from now could be much
different than they are today.
Congress should reinstate the Secretary's authority to waive
the matching funds requirement.
SCRI should prioritize the following types of research
projects:
1. New innovations and technologies such as:
Advancing research into technology improvements that will
address challenges relating to growing, crop forecasting,
harvesting, handling, and packing of agricultural products.
(Challenges of this nature are not likely to narrow in scope in
the foreseeable future without major technological breakthroughs.
It is therefore desired that appropriate amounts of dollars be
ensured towards investment in projects that would accelerate the
development and use of these advanced technologies in the
production or processing of specialty crops across scales of
production.)
Technologies that delay or inhibit ripening.
Remote Sensing technologies and decision support systems
driven by phenology and environmental factors.
Pesticide application systems and certify drift-reduction
technologies.
Systems, innovations, and management practices to extend
storage life of specialty crops.
Combating threats that impact specialty crop pollinators.
2. Research into plant breeding, genetics, genomics, crop
management, and other methods to improve crop characteristics
across scales of production, such as:
Product, taste, quality, and appearance.
Size controlling rootstock systems and enhanced rhizome
spread for perennial crops.
Mitigation of environmental risks and responses and
tolerances to environmental conditions.
Nutrient management, including plant nutrient uptake
efficiency.
Enhanced phytonutrient content.
Improved fruit set through advancements in plant health
and pollination efficiency.
Pest resistant crops.
3. Efforts to identify and address threats from pests and diseases,
such as:
Pest and disease management, including chemical
resistance to pests and diseases that results in reduced
pesticide applications and improved overall management
strategies.
Emerging and invasive species.
More effective understanding and utilization of existing
natural enemy complexes.
Improved monitoring systems for agricultural pests.
Effective systems for pre- and post-harvest management of
quarantine pests.
------------------------------------------------------------------------
Standalone Mechanization and Automation Research and Development
Program
The availability and rising cost of labor are major limiting
factors for specialty crop producers nationwide. Demographic shifts,
where populations now are mainly located in urban area settings, has
reduced the availability of agricultural labor, and caused an increase
in the need for more mechanization and automation within specialty crop
agriculture. Developing these new forms of technology is therefore
increasingly important with respect to successfully growing,
harvesting, and handling specialty crops.
Mechanization and automation research is currently funded through
several program areas in National Institute on Food and Agriculture.
Housing all specialty crop mechanization and automation research within
one single program would reduce redundancies and provide specialty crop
industries more opportunity to provide a level of oversight through
relevancy reviews for projects seeking funding.
------------------------------------------------------------------------
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Policy Recommendations
Congress should allocate $20 million in annual mandatory
spending to establish a new, standalone program that prioritizes
mechanization and automation for specialty crops and incorporate the
following framework:
1. Eligible applicants should include Land-Grant Universities,
Institutions of Higher Education and Technology, governmental
agencies, for-profit agricultural and non-agricultural entities,
commodity organizations.
2. The recipient of a mechanization/automation grant must provide
funds, in-kind contributions, or a combination of both, from
sources other than funds provided through the grant in an amount
that is at least 15% of the amount awarded.
3. This proposed mechanization/automation program would be managed
following an SCRI-like governance structure and relevance and
evaluation process that is guided by industry input.
4. Annually, the portfolio of funded projects should include
proposals that target small, medium, and large scales of specialty
crop production, and the cost to producers of technologies must be
cost-appropriate to the scale of production.
5. Project proposals must demonstrate strong support from the
specialty crop sector they target.
The new program should include the following funding priorities:
1. Projects that increase the competitiveness of specialty crops.
2. Projects that create or improve cost-effective technologies to
reduce a specialty crop grower's manual labor requirements and
increase the efficiency of crop production, resource management,
harvesting, processing, post-harvest technologies, and packaging
through mechanization, automation, and other innovations and
technologies.
3. Projects that increase adoption of mechanization and automation
technologies by:
Emphasizing adoption drivers that could include but are
not limited to connectivity, autonomy, reliability, durability,
in-field validation, and cost-effectiveness.
Investing and developing human capital to increase the
specialty crop sector's capacity to work with new technologies,
and to manage a more tech-focused farm workforce. (Innovations
resulting from projects will significantly increase the
resilience, economic sustainability, and impact on State and
local economies of a specialty crop sector or sectors.)
4. Projects that accelerate automation and mechanization through
prototype development, in-field trial testing, ongoing industry
engagement, and rapid commercialization.
------------------------------------------------------------------------
IR-4 Project
The IR-4 Project serves a critically important role for agriculture
by facilitating the availability of needed pest management solutions
for specialty crops. The private crop protection industry often focuses
its product development efforts and resources on large acreage, major
row crops where potential sales are significant. As a result, specialty
crops can be left with few tools for effectively managing pests and the
tools that are made available to specialty crops can lag as to the
latest advances in crop protection. The IR-4 project aims to combat
these market inefficiencies by advancing crop protection product
registrations for the specialty crop sector.
Specialty crops also have a great need for lower risk alternatives
(biobased and reduced risk chemical pesticides) to replace crop
protection products that have lost or are losing their registrations or
having uses further restricted. Also driving the need for alternatives
is the fact that certain products are no longer efficacious because of
pest resistance issues. So, IR-4's workload continues to grow.
The specialty crop sector desires increased IR-4 funding because
the need for the Project's services continues to increase while U.S.
government funding has remained stagnant. Specifically, funding for IR-
4 from government and non-government sources has remained relatively
flat over the past 10+ years. The result has meant that over the past
three years, the IR-4 Project has had to reduce its primary research
efforts by almost 25 percent. IR-4 currently does not have the
resources to adequately address pest management voids for specialty
crops. At present, there are more than 200 existing pest management
voids, and each year IR-4 receives an additional 100+ new research
requests. Based on current funding, IR-4 can only address a total of
approximately 50 such requests per year.
In addition to all the work IR-4 does on food crops, IR-4 also
performs crop protection work on non-food environmental horticultural
crops. This industry has no major support for crop protection
activities from other sources and is fully dependent on IR-4 for all
new approvals. This segment of IR-4 has been under-resourced long-term
and is in desperate need of new funds to address pest management voids.
IR-4 also fills voids associated with efficacy study requirements,
by performing crop safety, performance, and additional product research
with chemicals including biobased and reduced risk chemical pesticides.
These data are now required by some states and industry prior to
registration approval.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Congress should increase federal mandatory funding for the IR-
4 Project to $50 million annually.
------------------------------------------------------------------------
Office of Pest Management Policy (OPMP)
OPMP has been invaluable as a reviewer of EPA-proposed and final
regulations, guidance, etc., as well as for Endangered Species Act
(ESA) consultations with NOAA Fisheries and the Fish and Wildlife
Service associated with pesticide use in the United States. The size of
the office ( 10 professionals) pales in comparison to the several
hundreds of individuals employed in the EPA Office of Pesticide
Programs. Yet OPMP has been involved in a very substantive way in
almost all the significant EPA and ESA pesticide regulatory actions
that may affect the agricultural community, including specialty crops.
OPMP serves as an invaluable resource in addressing EPA actions before
they are finalized. The specialty crop industry believes that this role
needs to be supported and expanded to meet the challenges of future
workloads.
------------------------------------------------------------------------
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Policy Recommendation
Congress should allocate an additional $5 million annually in
mandatory funds for the USDA's Office of Pest Management Policy.
------------------------------------------------------------------------
Technical Assistance and Research Relating to the Food Safety
Modernization Act (FSMA)
Since the passage and implementation of FSMA, the produce industry
has faced a wide variety of hurdles in complying with this statute, the
accompanying regulations, and the obligations that they create.
Technical assistance for producers as well as additional research into
helping producers comply with FSMA are still needed. Changing
environmental conditions, stemming from less predictable and more
severe weather, coupled with an increase in ``mixed use'' agriculture
(where animals and crops are grown in close proximity to one another)
impact how and where human pathogens survive in the environment which
subsequently impacts fresh produce safety. The practices that may have
been effective a decade ago may no longer be adequate, and producers
need assistance understanding how changes in science, society, and
economics may influence the changes they need to make to ensure produce
continues to be produced safely.
Technical assistance needs to be based on sound science, and the
Cooperative Extension Service is well positioned to provide technical
assistance to producers to assist with their growing FSMA compliance
obligations. Comparably, National Institute on Food and Agriculture
(NIFA) should be given additional funding to conduct produce safety
research focused on helping producers comply with FSMA.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
The farm bill should include new mandatory funding for the
Cooperative Extension Service, to provide technical assistance to
specialty crop producers regarding their FSMA compliance.
The farm bill should include new mandatory funding for NIFA,
to conduct research into helping specialty crop producers comply with
their FSMA obligations.
------------------------------------------------------------------------
Emergency Citrus Disease Research and Development Trust Fund
The 2018 Farm Bill authorized the Emergency Citrus Disease Research
and Development Trust Fund to provide mandatory funding to combat
Huanglongbing (HLB). USDA-NIFA's Emergency Citrus Disease Research &
Extension (ECDRE) program aims at bringing together the nation's top
scientists to find scientifically sound solutions to HLB, in a
financially sustainable way. The ECDRE program was preceded by the
Citrus Disease Research and Extension Program.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
Congress should continue to allocate $25 million annually for
the Emergency Citrus Disease Research and Development Trust Fund
(``Citrus Trust Fund''). The Citrus Trust Fund was established in the
2018 Farm Bill and builds upon the previous farm bill's novel
investment in research to identify a cure for the deadly citrus
disease, Huanglongbing, or HLB.
------------------------------------------------------------------------
Title X Horticulture--Organics, AMS, APHIS
Specialty Crop Block Grant Program
The Specialty Crop Block Grant Program (SCBGP) was created to
provide greater federal assistance to specialty crop producers by
providing grants to state departments of agriculture to enhance the
competitiveness of those crops. SCBGP funds can support a wide array of
projects. SCBGP was first authorized in the 2004 Specialty Crops
Competitiveness Act but did not receive any funding until 2006. The
2008 Farm Bill provided SCBGP with its first mandatory funds at $55
million per year. The 2014 Farm Bill subsequently increased the
program's mandatory funding to $72.5 million per year through 2017, and
then $85 million per year in perpetuity starting in 2018. The 2018 Farm
Bill also made permanent the $5 million in annual mandatory funding for
the Specialty Crop Multi-State subprogram (SCMP). Since 2006, USDA has
invested more than $953 million through the SCBGP to fund 11,331
projects that have increased the long-term successes of producers and
broadened the market for specialty crops in the U.S. and abroad.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
The Specialty Crop Block Grant Program should be increased to
a funding level of not less than $100 million annually. The set-aside
of not less than $5 million for multi-state projects should also be
maintained.
USDA should require Block Grant administrators (e.g., state
department of agriculture) to conduct stakeholder outreach and
engagement prior to the application process.
Congress should reinforce that the Specialty Crop Block Grant
Program's primary purpose is to enhance the competitiveness of
specialty crop producers, by amending the statute with the following
language:
``to enhance the competitiveness of specialty crops through
priorities jointly identified by specialty crop producers, producer
groups, and state program administrators, including . . . .''
USDA should offer guidance to Block Grant administrators as
to how best to conduct proposal reviews to ensure industry relevancy
and consistency. This includes guidance on the selection and
responsibilities of reviewers.
USDA should improve its administration of the multi-state
program to ensure better consistency and transparency for applicants.
USDA should continue working with industry stakeholders and
state program administrators to assess the current program metrics
and results and to continually improve the quantification and
measurement of success for the Specialty Crop Block Grant Program.
------------------------------------------------------------------------
Organics
In 2019, 58% of organic sales came from crops, led by vegetables
and fruits (including berries and tree nuts) and represents $9 billion
in sales. With the growing importance of the organic production sector
in specialty crops and increasing participation throughout the supply
chain, the SCFBA has developed a series of policy recommendations aimed
to support the continued growth and expansion of this important part of
our members business operations.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
The National Organic Program (NOP) should be required to
consult with EPA and FDA on all regulatory decisions and include
relevant agency information or feedback provided with all Federal
Register notices (as accompanying reports). This should include the
public health implications of eliminating any sanitizers from the
National List of Allowed and Prohibited Substances.
The number and makeup of National Organics Standards Board
([NOSB]) seats should be expanded, to include more scientific
expertise, better account for differing commodity needs, and more
effectively respond to the growing consumer demand for organic
products.
Congress should authorize the NOP to hire more staff,
including technical experts, EPA and FDA liaisons, and economists, in
order to improve the timely consideration of, and possible regulatory
response to, NOSB recommendations. This would also provide the NOP
with more resources to make better informed regulatory decisions.
The NOSB should continue to require that a \2/3\ vote be
required for adoption of any proposed amendments to the National List
of Allowed and Prohibited Substances.
Employees of an owner or operator of an organic farming
operation should continue to be an eligible NOSB member on behalf of
their employer.
The National Organic Certification Cost-Share Program should
be reauthorized.
USDA should continue efforts (in cooperation with Customs and
Border Protection) to ensure the integrity of organic imports into
the United States. This includes the maintenance and improvement of
tracking, data collection, and investigation of organic produce
imports.
USDA should continue its organic production and market data
initiatives.
------------------------------------------------------------------------
Agricultural Marketing Service (AMS) Domestic Promotion Program
Most specialty crop sectors (e.g., pears, potatoes, asparagus,
flowers) are primarily composed of small and medium size producers who
individually do not have enough volume nor marketplace clout to create
demand for the commodity as a whole. While individual producers may be
successful at moving their product into the marketplace, creating the
dynamic that expands the marketplace and encourages consumer commodity
consumption is difficult given the fragmented nature of specialty crop
production. In addition, many domestic specialty crop products
increasingly face competition from both less expensive imports and
branded, highly refined manufactured products that can serve as
``like'' substitutes. USDA does not currently have clear authority to
create and operate a domestic promotion program to address these
challenges.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Grant USDA explicit authority to establish a domestic generic
promotion program exclusively for specialty crop producers and direct
USDA Agricultural Marketing Service (AMS) to develop the activity as
a competitive grant program purposed to create U.S. consumer demand
for domestically produced specialty crops.
1. Congress should direct USDA-AMS to establish a reimbursement-
based cost-share market promotion and development program for
specialty crops modeled conceptually on the Market Access Program
operated by the Foreign Agricultural Service.
2. Said program is intended to provide participants opportunity to
conduct certain marketing and promotion activities aimed at
developing, maintaining, or expanding commercial markets for U.S.
specialty crops within the United States.
3. The program should provide broad authority for participants to
develop multi-faceted generic promotion campaigns that are designed
to motivate the trade (e.g., retailers, wholesalers, foodservice
operators) to stock and promote, and consumers to buy specialty
crop products. Providing specialty crop producers with a year-over-
year opportunity to build demand-enhancing marketing campaigns,
while building expertise and capacity at AMS, will help create a
more positive environment into which specialty crop producers can
sell their products, thereby enhancing their viability, supporting
U.S. jobs, and bolstering the economies of rural communities across
the country.
4. Eligible participants would include U.S. nonprofit agricultural
trade organizations, U.S. agricultural cooperatives, organization
operating under federal marketing orders, state agencies or state
commodity boards, state regional trade groups. An entity receiving
a grant under this program shall provide non-Federal matching
funds, including in-kind contributions, equal to not less than 25%
the amount of the grant. The amount of participant contribution
should be determined by participants and considered as part of the
grant evaluation process.
5. Congress should fund the new program at $75 million annually,
with a percentage of authorized funding can be used by AMS for
building and maintaining capacity.
------------------------------------------------------------------------
Mechanization and Automation Technology Deployment Program
Dependence on manual and hand labor in the specialty crop sector
continues to be the predominate method to plant, monitor, and harvest
specialty crops. In fact, of the 20 most widely consumed fruits and
vegetables in the United States, 17 still require hand harvesting. In
almost all cases, hand harvesting results in higher grower production
costs resulting in higher food prices for consumers compared to other
food categories. In addition, domestic labor is increasingly limited
due to an aging work.
Mechanized and/or automated solutions are arriving in the
marketplace but are often not adopted quickly as industry best
practices because they are expensive and unproven and require
significant grower investment.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Congress should establish a reimbursement-based cost share
program within the Agricultural Marketing Service (AMS) exclusively
for specialty crop producers who are seeking to increase efficiency
by investing in mechanized and automated agri-tools.
1. Payments to producer operations under the program should be
formulated to provide a significant offset to their investment.
2. Examples of Automated or Mechanized Technologies include:
a. Remote, mobile, or drone sensing sensors for field level
monitoring of environmental variables for use in farm production
and/or processing management decision making;
b. Enhanced precision irrigation, pest and disease detection,
nutrient analysis, and crop load assessment;
c. Crop monitoring and analytics;
d. Potential and predictive near-infrared crop damaged
assessments;
e. Robotic/semi-autonomous/autonomous or mechanized systems or
other tools;
f. Seeding;
g. Weeding;
h. Harvesting;
i. Packing (field and in-house);
j. Pruning;
k. Spraying;
l. Transporting;
m. Climate Protection (e.g., shade cloth, light manipulation);
n. Cultural Practices; and
o. Other automated or mechanized systems or tools that increase
efficiency as determined by the Secretary.
3. Producers should be permitted to use a percentage of funding
received under this program for team member training or technical
assistance for learning new machinery, infrastructure maintenance,
etc.
------------------------------------------------------------------------
Specialty Crop Market News
For 100 years, USDA's Agricultural Marketing Service (AMS) has
provided free, unbiased price and sales information to assist in the
marketing and distribution of farm commodities. Each year, Market News
issues thousands of reports, providing the industry with key wholesale,
retail and shipping data. The reports give farmers, producers and other
agricultural businesses the information they need to evaluate market
conditions, identify trends, make purchasing decisions, monitor price
patterns, evaluate transportation equipment needs and accurately assess
movement.
Today, Specialty Crops Market News disseminates detailed
information on marketing conditions for hundreds of agricultural
commodities at major domestic and international wholesale markets,
production areas, and ports of entry. Using direct contacts with
salespersons, suppliers, brokers, and buyers, Market News reporters
collect, validate, analyze, and organize unbiased data on price,
volume, quality and condition, making it available within hours of
collection at no cost to you.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Congress should reauthorize the Specialty Crop Market News.
------------------------------------------------------------------------
Plant Pest and Disease Management and Disaster Prevention Program
(PPDMDPP)
The APHIS PPA 7721 program, initially established through the farm
bill's horticulture title, is currently funded at $75 million per year.
The funds support a wide array of plant pest-related projects under six
broad goal areas. The program provides 1 year funding, though some
projects are funded in successive years. There is an annual call for
project suggestions, which are vetted by goal-specific review teams,
which draft recommendations that comprise a spending plan which is
subject to final USDA review and approval. Industry representatives are
welcomed to participate in these review teams, with up to two per team
accommodated. SCFBA helps to coordinate industry volunteers, and the
continued robust stakeholder engagement is a critical component of the
process.
The program is working well and serving a variety of current and
emerging specialty crop industry needs. The passage of time and effects
of annual inflation have eroded the value of the program's investments
in pest and disease prevention and mitigation.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
The SCFBA recommends that the Plant Protection Act Sec. 7721
be funded at $90 million per year.
------------------------------------------------------------------------
National Clean Plant Network (NCPN)
NCPN supports a network of clean plant centers which provide plant
pathogen diagnostics and therapy and maintain collections of high-value
vegetatively propagated specialty crops with high-consequence pathogen
threats, notably viruses and viroids. Crops covered by the network
include apples, pears, stone fruit, citrus, grapes, berries, hops,
roses, and sweet potatoes.
NCPN is funded as a sub-component of PPA 7721. The law currently
specifies that NCPN be funded at ``not less than $5 million annually.''
In recent years, APHIS has funded NCPN at $7.5 million annually. Center
directors have recently expressed concerns that funding is consistently
falling short of meeting current and expected needs in the face of
rising material and personnel costs. Unlike the PPDMDPP, which provides
1 year funding of selected projects, NCPN represents an ongoing
investment in specialty crop ``support infrastructure'' and shortfalls
have long-term operational and staffing consequences.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
The SCFBA recommends that NCPN should be funded at not less
than $8 million per year.
------------------------------------------------------------------------
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Title XI Crop Insurance
Permanent Disaster Program
USDA offers a variety of programs to help farmers, ranchers,
communities, and businesses that have been hard hit by natural disaster
events. Traditionally, specialty crops have utilized the Tree
Assistance Program (TAP) and Noninsured Crop Disaster Assistance
Program (NAP). More recently the Wildfire, Hurricane Indemnity Program
has been utilized for those specialty crops growers in the South.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Although a standing workable permanent disaster program for
all agricultural commodities would be welcomed, it would be difficult
to define in a way that enhances the safety net for the specialty
crop community. Other enhancements to the farm bill should be
prioritized, including an improved crop insurance option. Creating a
known permanent structure and set of procedures for making payments
under any future ad hoc disaster programs would be useful, and
specialty crop producers should be involved in creating such a
statutory structure.
------------------------------------------------------------------------
General Crop Insurance Improvements
Crop insurance is viewed differently by varying crops within the
specialty crop industry. There are crops that have workable insurance
policies, and for those crops the issue is how to make improvements to
what is already a solid safety net. For the rest of the industry, which
is a majority, there are no crop insurance policies available, or the
crop insurance policies that exist are primitive or only available on a
limited basis.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
To secure a better safety net, exploration is needed to
develop effective applicable products for all uncovered specialty
crop producers as well as making it more attractive and easier to
deploy individual policies for current safety net users.
------------------------------------------------------------------------
Noninsured Crop Disaster Assistance Program (NAP)
NAP provides financial assistance to producers of non-insurable
crops when low yields, loss of inventory, or prevented planting occur
due to natural disasters. Since specialty crops continue to limited
access to risk management tools NAP has been a stop-gap for many in our
industry to have some type of coverage when disasters may occur.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
Move NAP from the Farm Service Agency to Risk Management
Agency, thereby removing the Adjusted Gross Income (AGI) limitations
and improving the marketing of the program to growers through crop
insurance agents.
Establish additional NAP coverage options addressing
shallower losses, as well as optional units.
As an alternative: If NAP remains under FSA, a uniform
exemption if 75% of AGI derived from farming would be recommended.
------------------------------------------------------------------------
Whole Farm Revenue Insurance Program
The program has limited utility for farming operations that need
support covering losses for a singular crop. This applies to single
crop and diversified farming operations.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
Expand Whole Farm crop insurance to include higher coverage
for single crop farms. (Currently producers can purchase a lower
level of coverage under Whole Farm but are not eligible for the
higher coverage without planting an extra crop.)
Remove the $8.5 million income cap to increase participation.
Increase the 30% growth in covered acreage year to year. This
limits how much growers can insure when they want to increase their
production.
------------------------------------------------------------------------
Data Collection
The Specialty crop industry is concerned about RMA's data
collection needs. Under disaster programs the data that USDA collects
before a pay-out are done all under self-certification. Congress can
indicate to the FCIC board that to stimulate and increase the speed of
policy development, initial data collection needs be loosened. This
will allow improved access to expand existing policies into new states.
This is particularly the case as climate change impacts production.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
Expanded use of the T-yields calculation beyond the cap of
three years when determining a growers 10 year average when data is
missing. [T-yields were used in the calculation of the prior 10 year
average if three or fewer years of actual yields were missing. To
determine eligibility for exclusion, the year evaluated must have
actual yields (crop insurance yield or NASS yield) for at least 7 of
the 10 previous years, with T-yields making up the rest.]
------------------------------------------------------------------------
Pricing vs. Benefit
Many specialty crop producers have experience crop insurance
policies with high premium costs with coverage levels and corresponding
payouts that are too low. As coverage levels increase so too do premium
rates, at some point producers decide to self-insure. Pricing accuracy
needs to be improved, and varietal development needs to be accelerated.
There are also concerns about whether policies reflect specialty crop
needs--such as covering the impacts of quarantine or food safety
outbreaks.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
Allow for Optional Units to section out fields and account
for different weather events in different field locations.
Remove harvest costs from the payment, which should help
lower premium costs. (As an example, while the Strawberry Production
and Revenue History program is not perfect, one useful feature to
replicate elsewhere is that harvest costs are removed.)
Prices should be county-specific for RMA programs to account
for the differences in seasons and marketing windows.
Higher levels of buy-up coverage for existing products are
needed as well as encouraging RMA to be quicker to price policies for
emerging varieties.
------------------------------------------------------------------------
Risk Management Agency Outreach to Specialty Crop Growers
RMA was mandated in the 2018 Farm Bill to engage in greater
outreach to specialty crop growers to develop a greater number of
policies covering specialty crop production. Outreach efforts have been
uneven and insufficient resulting in no meaningful increased
availability of crop insurance policies to specialty crop producers.
RMA relies on crop insurance agents to ``sell'' crop insurance policies
and engage with growers, but this model only works if there are crop
insurance policies to sell.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
RMA should apply an equitable outreach program in all States
engaging specialty crop producers, so producers understand how to
currently access and use new and existing programs.
------------------------------------------------------------------------
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Miscellaneous--Climate Change
Climate Change General Principles
Since the enactment of the Agriculture Improvement Act of 2018,
many new initiatives on climate change affecting agricultural
production have been proposed, debated, and even some have been
piloted. The specialty crop industry produces hundreds of diverse crops
in all regions of the country, each with their own unique production
methods, structures, and markets. The diversity of specialty crop
production in the United States presents many challenges when
formulating workable policies to combat global climate change.
Likewise, specialty crop growers need additional tools to help them
adapt to the changing climate and develop greater resiliency in their
operations.
As Congress inevitably considers adopting new farm bill initiative
on climate change, in addition to the policy recommendations outlined
below, Congress should consider the following principles with respect
to how those initiatives could affect specialty crops:
1. Congress and USDA should support and encourage public and private
research initiatives to better understand the intersection
of potential climate change initiatives and the diverse
production.
2. Any new programs should be voluntary in nature and consider the
diversified regional production of specialty crops.
3. Funding for a voluntary program should not divert resources from
current farm bill programs.
4. Federal climate change policies should consider mitigation and
resilience and adaptation.
5. Climate related programs need to be supported and accompanied by
outreach to all producers regardless of farm size,
location, or commodity. (Larger operations are often early-
adopters and critical to the success of new programs.
Initiatives should not directly or indirectly discriminate
against large operations.)
6. Climate related efforts need to be designed for the wide variety
of specialty crops and their unique production systems
across all programs. (For example, orchard-based and
perennial commodities vary significantly from root crops
and greenhouse production.)
7. Congress and USDA should consult with the specialty crop industry
prior to implementing any new climate initiative affecting
specialty crop producers.
Climate-friendly Production Methods and Consumer Labeling
It would be difficult to implement a single nationwide ``Climate-
Smart'' consumer labeling program for specialty crops. Therefore, the
following recommendations should be considered.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
Any ``Climate-Smart'' consumer labeling program should be
voluntary.
``Climate-Smart'' consumer labeling program should consider
the unique needs and diverse suite of production systems among
specialty crops.
Congress and USDA should consult extensively with the
specialty crop industry prior to implementing any ``Climate-Smart''
consumer labeling program affecting specialty crops to ensure that
any such standards are fair, accessible, and practical for specialty
crop producers.
------------------------------------------------------------------------
Carbon Markets and Other Climate Benefits Exchanges
Policy Recommendation--The SCFBA supports efforts to establish
consistent standards and other criteria for voluntary carbon markets
and other climate benefit exchanges to enhance consumer protections,
reduce barriers to entry, and maximize benefits for specialty crop
producers.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
The SCFBA supports conducting feasibility studies of carbon
markets and other climate benefit exchanges for specialty crops,
including:
1. Recognize the climate benefits of all specialty crop production
systems regardless of farm size, location, or commodity.
2. Recognize the diversity of production practices associated with
specialty crops and provide credits for practice improvement based
on regionality and crop needs.
3. Directly engage the specialty crop industry in the process to
help ensure standards are fair, accessible, and practical for
specialty crop producers (for example, orchard-based and perennial
commodities vary significantly from root crops and greenhouse
production).
Require climate benefit models to integrate broad ecosystem
services credits for specialty crops and their inputs and recyclable
byproducts, both CEA and land-based.
------------------------------------------------------------------------
Credits for Inherent Climate Benefits for Specialty Crops
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
Support the development of a pilot project to develop a
Climate Score based on the climate/nutrient delivery per climate
benefit unit of production provided it does not disrupt the
marketplace.
Require climate benefit models to integrate broad ecosystem
service credits for specialty crops and their inputs and recyclable
byproducts, both controlled environment (CEA) and land-based.
Define intentionally applied ecosystem services and climate
benefit for early adoption of such practices with set retroactive
timeline.
Expand and adapt the COMET-Farm tool so that it works for the
specialty crop industry by investing in soil science research and
updates to the NRCS SSURGO database, which provides site-specific
climate data and results that include major specialty crop industries
from each state.
Provide funding for the COMET-Farm tool to improve systems
integration with existing data sources and models and to improve the
overall diversity of crops. Benchmarks for inclusion of at least 100
crops into the COMET tool within 5 years should be put in place.
Benchmarked crops should include major specialty crop industries from
each state.
------------------------------------------------------------------------
Miscellaneous--Data
The Department of Agriculture's collection and generation of timely
data on the specialty crop industry is generally less accurate and
comprehensive when compared to other agricultural commodities. During
the formulation and implementation of both the Market Facilitation
Program (MFP) and the Coronavirus Food Assistance Program (CFAP), the
complications and consequences of having insufficient data at USDA
became clear to organizations representing specialty crops, Members of
Congress, and even many within USDA itself.
The specialty crop industry produces hundreds of diverse crops in
all regions of the country, each with their own unique business models,
markets, and pricing. Although it is understandably more challenging to
gather data on specialty crops than other commodity sectors, it is
critically important for the health of the future competitiveness of
specialty crop producers that such data be collected and understood
within USDA.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendations
The Office of the Chief Economist should include regular
economic assessments of the specialty crop industry in the United
States whenever the health of the agricultural economy is being
evaluated, particularly when providing such reports to the Secretary
or USDA leadership. Sufficient indicators and analysis on the
specialty crop industry should be included in any bulletins, reports,
or journal articles, such as the World Agricultural Supply and Demand
Estimates report, in which analysis or forecasting of multiple
agricultural sectors is being prepared by agencies of USDA including
the Office of the Chief Economist.
USDA should devise, report to Congress, and implement a
strategy to establish or improve specialty crop expertise within each
of its subagencies, including the Office of the Chief Economist.
The Office of the Chief of Economist should be required, when
appropriate, to account for regional variations and aggregations of
specialty crops.
Congress should ensure that NASS, AMS, and related agencies
have sufficient resources to fulfill their mission and maintain
robust data collection and reporting capabilities across the
specialty crop industry in the United States.
USDA should review its current data collection processes,
protocols, and sources and propose ways to expand its outreach to,
and collaboration with, industry, as well as identify barriers that
challenge industry participation and identify opportunities to
increase industry participation.
USDA should work with stakeholders to ensure the data
protection and privacy needs of the U.S. specialty crop industry are
being effectively addressed.
------------------------------------------------------------------------
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Miscellaneous--General Statements of Policy
The Definition of Specialty Crops for All USDA Programs
The Specialty Crop Competitiveness Act of 2004 established new
programs at USDA to meet the unique needs of specialty crops in
critical areas such as research, trade, and regional market development
and expansion. Subsequent farm bills have continued to improve and
refine these programs to meet the unique needs of specialty crops, such
as in 2008 when Congress allocated mandatory funding for the Specialty
Crop Block Grant Program, included the first-ever farm bill title
dedicated to horticulture, and established a new pest and disease
program; again in 2014 when Congress fully funded the Specialty Crop
Research Initiative and allocated additional resources to specialty
crop programs; and most recently in 2018 when Congress created the
AGARDA advanced research program, expanded permanent baseline funding
for the Specialty Crop Research Initiative, and modernized the
Technical Assistance for Specialty Crops international trade program.
These initiatives are chronically under-funded and oversubscribed.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
The SCFBA opposes any attempt to expand the definition of
specialty crops beyond the commonly understood meaning set forth in
the 2004 Act. The Specialty Crop Competitiveness Act of 2004 defines
specialty crop as fruits, vegetables, tree nuts, dried fruits, and
nursery crops (including floriculture).
------------------------------------------------------------------------
Labor and Immigration Reform
Access to a legal, reliable workforce is a top priority for
Alliance members. Although the farm bill historically has not been a
vehicle for addressing labor issues, the long overdue lack of reform of
our nation's agricultural immigration system dramatically undermines
the farm bill's investments in the specialty crop industry.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
The SCFBA continues to support critically needed
modernization of the immigration system and specific changes to the
underlying statutes, including:
Providing for earned legal status for farm workers under
appropriate conditions; and
Reforming the current guestworker programs to meet the needs of all
agricultural sectors and ensuring that the programs do not place
undue burden on producers.
------------------------------------------------------------------------
Potential Risk Management/Safety Net Program Exclusively for Specialty
Crops
Since the enactment of the Agriculture Improvement Act of 2018,
specialty crop producers have confronted new and increasing economic
challenges. Drought, hurricane, fire, and other natural disasters;
disruptions to the supply chain by a global pandemic; rising
competition from low-cost seasonal and perishable imports; tariff
disputes between the United States and significant export markets;
significant food safety outbreaks; and labor shortages are among the
many challenges impacting the economic viability of specialty crop
producers in the United States.
During this period, Congress and USDA have implemented several ad
hoc programs in an attempt to assist producers with these unprecedented
challenges. Although these programs underscored the reality that
specialty crop producers do in fact need a robust, flexible, and
affordable safety net to enhance their competitiveness, these programs
also demonstrated that existing tools are inadequate to provide
meaningful protection for specialty crop growers who produce hundreds
of diverse crops in all regions of the country, each with their own
unique business models, markets, and pricing.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Policy Recommendation
The SCFBA has formed a high-level working group to evaluate
the feasibility of proposing that Congress establish an affordable
and effective risk management program exclusively for specialty crop
growers. Such a program would provide meaningful compensation from a
wide range of naturally occurring and other economic perils that
impede the competitiveness of specialty crop growers in the United
States.
------------------------------------------------------------------------
[Unique Challenges Confronting Seasonal and Perishable Producers]
SCFBA recognizes that some U.S.-grown and domestically marketed
seasonal and perishable fruit and vegetable producers face market
challenges from imports. Because of the short window during which
seasonal and perishable produce is harvested and marketed, imports of a
product immediately before or during a domestic grower's marketing
window may negatively affect demand and price for some U.S.-grown
products, particularly if the import prices are significantly lower.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Steering Committee
SCFBA Leadership
Mike Joyner (Co-Chairman) Dave Puglia (Co-Chairman)
President President & CEO
Florida Fruit & Vegetable Western Growers Association
Association
Maitland, FL Irvine, CA
Kam Quarles (Co-Chairman) Robert Guenther (Secretariat)
CEO Chief Public Policy Officer
National Potato Council International Fresh Produce
Association
Washington, D.C. Washington, D.C.
SCFBA Steering Committee Members
Jim Bair Ken Melban
President & CEO Vice President of Industry Affairs
and Operations
U.S. Apple Association California Avocado Commission
Vienna, VA Irvine, CA
Chris Butts Mark Powers
Executive Vice President President
Georgia Fruit & Vegetable Growers Northwest Horticultural Council
Association
LaGrange, GA Yakima, WA
Charles Conner Rachel Roberts
President & CEO President
National Council of Farmer American Mushroom Institute
Cooperatives
Washington, D.C. Washington, D.C.
Kasey Cronquist Eric Venturini
President Executive Director
North American Blueberry Council Wild Blueberry Commission of Maine
Folsom, CA Orono, ME
Cathy Burns Richard Matoian
CEO President
International Fresh Produce American Pistachio Growers
Association
Newark, DE Fresno, CA
Natalie Collins Kathleen Nave
President President
California Association of Winegrape California Table Grape Commission
Growers
Sacramento, CA Fresno, CA
Casey Creamer Craig Regelbrugge
President & CEO Executive Vice President of
California Citrus Mutual Advocacy, Research, and Industry
Relations
Exeter, CA AmericanHort
Columbus, OH
Sam Eaton Alicia Rockwell
Vice President of Legal & Chief Government Affairs Officer
Governmental Affairs
Idaho Potato Commission Blue Diamond Growers
Eagle, ID Sacramento, CA
Ian LeMay Chris Voigt
President Executive Director
California Fresh Fruit Association Washington State Potato Commission
Fresno, CA Moses Lake, WA
The Chairman. Mr. Talley, thank you very much.
Now Mr. Weinzierl, you are recognized. Please begin when
you are ready.
STATEMENT OF RODNEY M. WEINZIERL, OWNER, WEINZIERL FARMS;
EXECUTIVE DIRECTOR, ILLINOIS CORN GROWERS ASSOCIATION;
EXECUTIVE DIRECTOR, ILLINOIS CORN
MARKETING BOARD, STANFORD, IL
Mr. Weinzierl. Chairman Thompson, Ranking Member Craig,
Members of the Committee, thank you for the opportunity to
testify today in front of the House Agriculture Committee. I am
Rodney Weinzierl. I serve as Executive Director of the Illinois
Corn Growers and the Illinois Corn Marketing Board, but I also
grow corn and soybeans in rural Stanford, Illinois, and I am
here today as a farmer.
I have farmed for the last 26 years, following my father,
my grandfather on the same plot of land, farming for the same
landlord family since 1912. My wife and I began transitioning
our farm to our oldest daughter, Gracie, and this process has
highlighted the challenges facing the next generation of family
farmers.
Today, the farm economy is struggling. I believe two
fundamental issues are driving the downturn: lack of demand and
rising input costs. Regarding demand, an Illinois farmer's
first priority is to derive profit from the market, not from
the government. To that end, we consistently invest in and
advocate U.S. Government invest in the development of three
major markets: livestock, ethanol, and exports. Last year's
House Committee farm bill included an increase in funding for
Foreign Market Development and the Market Access Programs,
targeting demand, growth from international buyers. Investment
here could be very impactful to the ag economy as we face the
fifth consecutive annual trade deficit in 7 years. Export
markets generate demand and profitability.
Given more time, I would love to dive into the
opportunities available for family farmers if the U.S. built a
vibrant, high-octane cleaner burning fuel standard, which would
allow the sale of more corn-based ethanol. Growing demand here
would drastically impact the profitability proposition for the
U.S. corn farmer.
The second issue, input costs, rose during a period of high
commodity prices and have not yet returned to levels to allow
family farmers to be profitable. My financials over the past 26
years reflect on two opportunities for the Committee, crop
insurance and transparency in input costs, particularly
fertilizer costs. I struggle to understand how nitrogen costs
have risen dramatically over the past years, despite the
relatively stable price of the primary feedstock, natural gas.
I understand that we operate in a global market and that the
Russian invasion of Ukraine has created supply challenges.
However, throughout my career, the fertilizer industry has
twice had the opportunity to expand production to meet market
demands, yet has not done so. Increasing market transparency
and/or creating risk management tools like futures contracts on
the Chicago Mercantile Exchange could help farmers manage input
costs more effectively.
Regarding crop insurance, this program is designed to
operate at a loss ratio of 1.0, meaning for every dollar
premium paid in, $1 is paid out as an indemnity payment. Over
26 years, my farm has only received 20 percent of what I should
have received as a loss ratio of 1.0. Most farms in Illinois
are in similar predicaments. If crop insurance rates were
reevaluated, particularly in the Midwest, we could generate
hundreds of millions of dollars in savings. I would encourage
those savings to be used to improve crop insurance and support
other farm bill titles.
Because of my own farm experience using conservation
practices on our farm, I see trends worth exploring for further
risk reduction, potentially generating even more savings for
crop insurance. I believe our conservation practices, no-till,
and cover crops primarily have reduced risk on our farm, making
our soil more resilient to drought and excess rainfall. This,
in turn, has led to fewer crop insurance indemnity payments and
lower loss ratios for our policies.
Important to note, our conservation adoption has been
implemented without the aid of NRCS programs. This is due, in
part, to their practice standards being too rigid, reducing my
ability to innovate and often being too risky for my
productivity and success. NRCS could lead farmers by providing
direly needed technical support regardless of farm families
program signup status.
As I wrap up, I would like to mention my wife and her 4-H
club run the local food pantry in our small town. I have seen
firsthand the value and necessity of food assistance programs
in our rural community. The nutrition program in the farm bill
is so important to communities like mine in food deserts where
there is significant need.
Thank you very much for your time and consideration, Mr.
Chairman.
[The prepared statement of Mr. Weinzierl follows:]
Prepared Statement of Rodney M. Weinzierl, Owner, Weinzierl Farms;
Executive Director, Illinois Corn Growers Association;
Executive Director, Illinois Corn Marketing Board, Stanford, IL
Chairman Thompson and Ranking Member Craig, thank you for the
opportunity to testify today in front of the House Agriculture
Committee.
I serve as the Executive Director of the IL Corn Growers
Association and IL Corn Marketing Board. But I also grow corn and
soybeans in rural Stanford, Illinois and I'm here today as a farmer. I
have farmed for 26 years, following my father and my grandfather on the
same plot of land, farming with the same landlord family since 1912. My
wife and I have begun transitioning the farm to my oldest daughter,
Gracie. This process has highlighted the challenges facing the next
generation of family farmers.
The reality of the next generation of family farmer looks slightly
different than the likely picture in your mind. Beginning farmers today
are likely to be in their mid-30s-40s and in many cases have been
working off the farm. Many of them need to continue working off the
farm even when the opportunity presents itself to come back to the
farm. My daughter fits this demographic exactly. USDA's research shows
that 86 percent of total farms fall into the category of ``small farm''
based on annual gross farm income. This research also confirms that the
total income for households in that category includes off-farm
contributions of nearly 50 percent.\1\
---------------------------------------------------------------------------
\1\ https://www.ers.usda.gov/data-products/chart-gallery/chart-
detail?chartId=58426.
---------------------------------------------------------------------------
2023 Family Living All--Total with Taxes
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The same inflation problems impacting general consumer households
also impact the households of farm families; costs of groceries,
utilities, and expendables are all increasing. Health insurance is also
often supported by off-farm employment. Though medical costs are also
increasing, the data reflects an average of marketplace-procured health
care and employer-provided health care, mitigating the reflection of
the increase.\2\
---------------------------------------------------------------------------
\2\ https://farmdocdaily.illinois.edu/2024/11/when-creating-2025-
crop-budgets-keep-in-mind-family-living-costs.html.
---------------------------------------------------------------------------
Again, thinking about my daughter's experience with traditional
programs like FSA beginning farmer loan programs, she has found that
they are not realistic. They do not accurately factor liquidity and the
probability of cash flow to inflated land values. One proposed solution
is creating a pathway for the next generation to be more competitive in
securing land. While many of the next generation of farmers are working
off-farm contributing to traditional retirement portfolios ([401(k)],
IRA), historically farmers invested in land as their retirement. A
proposal for consideration could be to allow a farmer to make a
withdrawal from her retirement account without the ten percent penalty
to use towards a land purchase if she will be the principal operator of
that land. This would give young farmers more buying power and access
to capital for a down payment.
Creating opportunities for the next generation will take innovative
solutions like this one, but the foundational problem is that we cannot
offer a financially stable ag economy for them to return to. Young
people want to come back to the family farm when the farm economy is
vibrant, and the opportunity is clear. Today, the farm economy is
struggling, and I believe two fundamental issues are driving the
downturn: lack of demand and rising input costs.
Corn Demand Concerns
Regarding demand, an Illinois corn farmer's first priority is to
derive profit from the market, not from the government. To that end, we
consistently invest in and advocate that the U.S. Government invest in
the development of three major markets: livestock, ethanol, and
exports. Farmers are concerned that these three markets over time
reflect a flat demand proposition. In this environment, the only
opportunity for a corn farmer to boost his or her corn price is to
experience a widespread crop failure that significantly impacts supply.
U.S. Corn Utilization
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Last year's House Committee farm bill included an increase in
funding for Foreign Market Development and Market Access Programs,
targeting demand growth from international buyers. Investment here
could be very impactful to the ag economy, as we face the fifth
consecutive annual trade deficit in 7 years and a 2025 ag trade deficit
forecasted to reach a record $42.5 billion. Export markets generate
demand and profitability. This graph demonstrates that significant
opportunities exist for exports of corn ``in all forms;'' grain exports
are one opportunity, but also high-quality processed products like
ethanol and corn-fed meats and poultry produced in the U.S.
U.S. ``Corn-in-All-Forms'' Exports
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The future of U.S. corn ethanol demand is uncertain at best.
Domestic ethanol consumption peaked in 2019, and the current fuel
policy will contribute to further erosion of the market. Congress could
pass legislation to adopt a high-octane, clean-burning fuel standard
that will ensure the longevity of internal combustion engines and the
future of U.S. ethanol demand, but to date, this has not happened.
Growing demand for ethanol would drastically impact the profitability
proposition of U.S. corn farmers. Due to competition for the acres, it
could potentially benefit all row crop farmers. Currently, the
proposition for ethanol demand is bleak based on regulatory barriers
placed on growth in this market and regulations that push electric
vehicles over internal combustion engine vehicles.
U.S. Motor Gasoline Consumption Forecasts
PRX Calculations
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Notes: Energy Information Administration (EIA), Petroleum
Supply Annual (PSA), Annual Energy Outlook (AEO), Short-Term
Energy Outlook (STEO), International Energy Agency (IEA), and
Electric Vehicles (EVs).
2024 PRX Report not intended as trade
recommendation. Analysis based in part on public data and PRX
best judgement.
Input Cost Concerns
Input Costs vs. Corn Price Received
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Input costs rose during a period of higher commodity prices and
have not returned to levels that allow family farmers to be profitable.
Input costs can be classified as seed costs, fertilizer costs,
machinery and labor costs, and cash rent. This chart demonstrates how
fertilizer costs in particular are tied to corn prices (and how much
manufacturers can extract from the farmer) and are not associated with
the cost of producing fertilizers. From Ag Economists at farmdoc, the
problem will not be solved by passing additional dollars out to farmers
to keep them afloat; additional dollars only prolong the problem and do
not place any downward pressure on the exorbitant input costs that are
half of the problem.
Figure 1. Returns to a 50% Corn--50% Soybean Rotation in $ Per Acre on
Central Illinois, Cash Rented Farmland (Includes Estimated EA
Payments for 2024)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: Illinois FBFM and farmdoc projections.
According to the farmdoc team at the University of Illinois, 2025
will be the third year of negative returns for Illinois corn and
soybean farms. The magnitude of the downturn is yet to be determined
but has the potential to be on par with the 1980s farm financial
crisis. Please consider the following two tables, prepared by farmdoc,
that detail each cost an average farmer will incur to plant a crop in
2025, as well as the return and break-even commodity prices. The losses
are significant for both corn and soybeans with no projected upturn in
the market ahead.
Table 1. 2025 Corn and Soybean Budgets for Northern, Central, and Southern Illinois
----------------------------------------------------------------------------------------------------------------
Northern Central-High Central-Low Southern
---------------------------------------------------------------
Corn Beans Corn Beans Corn Beans Corn Beans
----------------------------------------------------------------------------------------------------------------
Yield per acre 228 69 236 75 223 68 195 61
Price per bu $4.30 $10.20 $4.30 $10.20 $4.30 $10.20 $4.30 $10.20
Crop revenue $980 $704 $1,015 $765 $959 $694 $839 $622
ARC/PLC 10 10 10 10 9 9 9 9
Ad hoc Federal payments 0 0 0 0 0 0 0 0
Crop insurance proceeds 0 0 0 0 0 0 0 0
---------------------------------------------------------------
Gross revenue $990 $714 $1,025 $775 $968 $703 $848 $631
---------------------------------------------------------------
Fertilizers 165 58 165 65 160 62 160 72
Pesticides 101 65 122 74 119 75 113 75
Seed 126 78 127 81 133 71 119 79
Drying 22 0 22 0 20 1 11 0
Storage 9 4 10 5 9 3 4 3
Crop insurance 19 10 19 8 19 9 23 12
---------------------------------------------------------------
Total direct costs $442 $215 $465 $233 $460 $221 $430 $241
---------------------------------------------------------------
Machine hire/lease 31 26 21 22 24 24 24 22
Utilities 8 6 6 5 8 7 8 7
Machine repair 45 36 39 37 45 43 45 40
Fuel and oil 22 16 20 17 19 17 23 23
Light vehicle 2 2 2 2 2 2 2 2
Mach. depreciation 76 65 83 73 80 81 84 81
---------------------------------------------------------------
Total power costs $184 $151 $171 $156 $178 $174 $186 $175
---------------------------------------------------------------
Hired labor 34 30 27 24 28 26 27 26
Building repair and rent 14 7 10 9 8 6 6 6
Building depreciation 18 9 17 13 19 12 12 12
Insurance 13 9 15 15 17 17 17 17
Misc. 13 13 12 12 13 13 13 13
Interest (non-land) 39 31 30 28 26 21 23 21
---------------------------------------------------------------
Total overhead costs $131 $99 $111 $101 $111 $95 $98 $95
---------------------------------------------------------------
Total non-land costs $757 $465 $747 $490 $749 $490 $714 $511
---------------------------------------------------------------
Operator and land return $233 $249 $278 $285 $219 $213 $134 $120
---------------------------------------------------------------
Land costs (cash rent) 295 295 339 339 275 275 194 194
---------------------------------------------------------------
Farmer return ^$62 ^$46 ^$61 ^$54 ^$56 ^$62 ^$61 ^$74
---------------------------------------------------------------
Break-even price to cover:
Non-land costs $3.32 $6.74 $3.17 $6.53 $3.36 $7.21 $3.66 $8.38
Total costs \1\ $4.61 $11.01 $4.60 $11.05 $4.59 $11.25 $4.66 $11.56
---------------------------------------------------------------
Corn minus Soybean Return ^$15
^$7
$6
$13
----------------------------------------------------------------------------------------------------------------
\1\ Equals non-land costs plus land costs.
Table 2. Corn and Soybean Returns, Central Illinois with High-Productivity Farmland
----------------------------------------------------------------------------------------------------------------
Corn Soybeans
-----------------------------------------------
2023 2024P 2025P 2023 2024P 2025P
----------------------------------------------------------------------------------------------------------------
Yield per acre 232 239 236 75 77 75
Price per bu $4.50 $4.25 $4.30 $11.30 $10.20 $10.20
LDP per bu
-----------------------------------------------
$/acre $/acre $/acre $/acre $/acre $/acre
-----------------------------------------------
Crop revenue $1,044 $1,016 $1,015 $848 $785 $765
ARC/PLC 0 5 10 0 5 10
Ad hoc Federal payments 0 43 0 0 30 0
Crop insurance proceeds 22 5 0 5 5 0
-----------------------------------------------
Gross revenue $1,066 $1,068 $1,025 $853 $825 $775
-----------------------------------------------
Fertilizers 289 180 165 87 73 65
Pesticides 124 124 122 75 75 74
Seed 129 129 127 83 82 81
Drying 24 24 22 0 0 0
Storage 11 11 10 6 6 5
Crop insurance 24 20 19 10 8 8
-----------------------------------------------
Total direct costs $601 $488 $465 $261 $244 $233
-----------------------------------------------
Machine hire/lease 19 21 21 19 21 22
Utilities 5 6 6 5 6 5
Machine repair 35 37 39 35 37 37
Fuel and oil 23 21 20 23 25 17
Light vehicle 2 2 2 2 2 2
Mach. depreciation 85 85 83 74 74 73
-----------------------------------------------
Total power costs $169 $172 $171 $158 $165 $156
-----------------------------------------------
Hired labor 24 26 27 23 24 24
Building repair and rent 10 11 10 9 10 9
Building depreciation 15 17 17 12 13 13
Insurance 14 15 15 14 15 15
Misc. 11 12 12 11 12 12
Interest (non-land) 27 31 30 27 29 28
-----------------------------------------------
Total overhead costs $101 $112 $111 $96 $103 $101
-----------------------------------------------
Total non-land costs $871 $772 $747 $515 $512 $490
-----------------------------------------------
Operator and land return $195 $296 $278 $338 $313 $285
-----------------------------------------------
Land costs (cash rent) 359 359 339 359 359 339
-----------------------------------------------
Farmer return ^$164 ^$63 ^$61 ^$22 ^$46 ^$54
-----------------------------------------------
Break-even price to cover $/bu $/bu $/bu $/bu $/bu $/bu
-----------------------------------------------
Non-land costs $3.75 $3.23 $3.17 $6.87 $6.65 $6.53
Total costs \1\ $5.30 $4.73 $4.60 $11.65 $11.31 $11.05
----------------------------------------------------------------------------------------------------------------
\1\ Equals non-land costs plus land costs (average cash rent for the region).
My financials over the past 26 years reflect two opportunities for
the Committee regarding input costs for family farmers: crop insurance
and transparency in input costs, particularly fertilizer costs. I
struggle to understand how nitrogen costs have risen so dramatically
over the past years despite the relatively stable price of its primary
feedstock, natural gas. I understand that we operate in a global market
and that the Russian invasion of Ukraine has created supply challenges.
However, throughout my career, the fertilizer industry has twice had
the opportunity to expand production to meet market demands, yet it has
not done so. Increasing market transparency and/or creating risk
management tools like futures contracts on the Chicago Mercantile
Exchange could help farmers manage input costs more effectively.
Similarly, investigating crop insurance as detailed below could equal
out the system and save hundreds of millions of dollars or more.
Crop Insurance and Title [I] Program Concerns
The current structure of farm programs creates advantages for some
U.S. farmers over others. Title [I] programs were always intended to
support farmers experiencing longer-term declines in the farm economy.
Payments under these programs are pegged to ``base acres'' that were
established in the early 1980s. This was intentional--there was concern
that these programs could encourage farmers to ``plant for the
program'' rather than ``planting for the market''. Therefore, payments
were purposely decoupled from recent plantings. The result is that
farmers today may benefit from or be hurt by planting decisions made
decades ago.
Some have called for a voluntary update to base acres, but this
will only further entrench the problematic aspects of the program.
Depending on the value of the base acre (some crops like have higher
per acre values than others), farmers will make the rational economic
decision to maintain or switch to the highest value base possible--even
if that farmer does not plan to grow the crop in the future. A
mandatory base acre update is one way to address this systemic problem
within the commodity programs.
This is a particular concern for Midwestern farmers like me who
have traditionally grown and will continue to grow corn and soybeans.
Over time, the market has driven higher demand and prices for corn
(mainly via the development and expansion of the ethanol market) and
soybeans (primarily increased export demand from China). This has
encouraged corn and soybean planting across the nation and in regions
that were traditionally not corn and soybean areas. We welcome
additional production and industry engagement from non-traditional
areas, but those areas may have the added benefit of holding higher-
value base acres. In this scenario, a farmer can plant what the market
tells her to while also receiving government payments simply for being
lucky that her grandfather planted another crop with a higher-value
base acre 40+ years ago.
Crop insurance is particularly unequal among regions of the United
States due to the lack of actuary updates to the program. This program
is supposed to operate at a loss ratio of 1.0, meaning for every $1
paid in, $1 is returned to the farmer on average. Over 26 years, my
farm has only received 20 percent of what I should have received at a
loss ratio of 1.0. Most farmers in Illinois are in similar
predicaments.
Other regions of the country have very different experiences with
crop insurance. Some areas receive crop insurance payments in excess of
premium and subsidy contributions. This means that farmers in lower-
risk regions subsidize their neighbors in higher-risk areas. If
Congress does not act to reform this program, it will encourage ``low-
risk'' farmers to exit the program and severely skew the overall risk
pool.
Congress required the Risk Management Agency to investigate and
potentially re-rate the crop insurance program in the 2014 Farm Bill.
Based on current loss ratios the changes were either insufficient to
resolve the problem or have not been kept up to date as we are
experiencing the same inequities all over again. If crop insurance
rates were reevaluated and reduced--particularly in the Midwest--we
could generate hundreds of millions of dollars or even billions in
savings. I would encourage the savings to be used to improve crop
insurance and support other farm bill titles.
Net Payments Per Acre
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
I would like to see the Committee consider more regional equity
relative to the current Titles I and XI. If this is not possible due to
the cost or the disruption in the farm community, then Congress must
make adjustments to the Crop Insurance Title that properly rates
policies for ``low-risk'' farmers so that they do not choose to ``self-
insure'' affecting the entire program's future.
I've referenced four articles from the University of Illinois'
farmdoc Team of Agricultural Economists:
Base Acres, Planted Acres, and Ad Hoc Payments, https://
farmdocdaily.illinois.edu/2020/09/a-farm-policy-dilemma-base-
acres-planted-acres-and-ad-hoc-payments.html
Planted Acres and Additional Pieces of the Base Acres Puzzle,
https://farmdocdaily.illinois.edu/2023/08/farm-bill-2023-
planted-acres-and-additional-pieces-of-the-base-acres-
puzzle.html
Payment Impacts of Commodity Title for House Bill, https://
farmdocdaily.illinois.edu/2024/05/spending-impacts-of-house-
proposal-for-commodity-title-changes.html
Loss Ratios--Midwest and Other States, https://
farmdocdaily.illinois.edu/2024/07/crop-insurance-loss-
performance-in-illinois-and-the-midwest.html
Conservation Concerns
Because of my on-farm experience using conservation practices on
our farm, I see trends worth exploring for further crop insurance cost
savings and improvement. I believe our conservation practices--no-till
and cover crops primarily--have reduced risk on our farm by making our
soil more resilient to both drought and excess rainfall. This, in turn,
has led to fewer crop insurance indemnity payments and lower loss
ratios for our policies. Additionally, implementing these conservation
measures has not negatively impacted productivity gains in both corn
and soybeans. We are producing more year-over-year while protecting and
improving resources for the future.
Corn Yields, McLean County and Soybean Yields, McLean County and
Weinzierl Farm, 1991 to 2023 Weinzierl Farm, 1991 to 2023
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
County yields are from Risk Management Agency.
2019 was a historic year across the country when unprecedented
heavy spring rainfalls led to a record number of acres that went
unplanted (prevent plant). An analysis in 2022 investigated six key row
crop states to determine the impact of two conservation practices:
cover crops and no-till. When these two practices were used, the result
was a 24 percent reduction in the odds ratio.\3\ This type of research
and recognition should continue and be broadly shared to not only
positively impact the profitability and success of the farmers who
employ these practices, but also reduce indemnities, reduce disaster
claims, and save taxpayers money.
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\3\ https://foodandagpolicy.org/homepage/focus-areas/agriculture-
data/conservation-and-crop-insurance-research-pilot/.
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In another study completed in 2023, the University of Illinois
farmdoc team looked at 6 years of fields with and without a history of
cover crops. They found that in corn, ``. . . the use of cover crops
did not increase yield risk. In fact, the use of cover crops increased
yields in the lowest 5% of yields. Overall, these results suggest that
the use of cover crops in corn reduced downside yield risk.'' \4\
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\4\ https://farmdocdaily.illinois.edu/2023/10/yield-and-yield-
risks-of-cover-crops-in-east-central-illinois.html.
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Important to note: our conservation adoption has been implemented
without the aid of traditional Natural Resources Conservation Service
(NRCS) programs. This is due in part to their practice standards being
too rigid, reducing my ability to innovate and often being too risky
for my productivity and success. NRCS could lead farmers by providing
direly needed technical support regardless of the farm family's program
sign-up status.
Historically NRCS played a key role in information dissemination
and technical expertise. Recently, that role has focused more on
prioritizing farmers signing up for programs than before. Many farmers
are willing to make conservation investments with their own financial
resources but lack technical guidance and expertise. NRCS stepped away
from this role and has left a gaping hole.
Likewise, NRCS programs have state-level practice standards that
can overlook the vast differences in geographic and resource concerns
in certain states. Illinois for example is 390 miles long and has over
600 soil types but has one single practice standard for implementing
cover crops. In addition, the successful management of cover crops
ahead of corn is very different from the management ahead of soybeans
and these differences aren't reflected. I would like to see NRCS re-
prioritize its role as a technical expert and aid and encourage farmer
innovation, flexibility, and on-farm creativity to find conservation
success and sustainable competitiveness.
As I wrap up, I would like to mention that my wife and her 4-H club
run the local food pantry in our small town. I have seen firsthand the
value and necessity of food assistance programs in our rural community.
The nutrition program of the farm bill is so important to communities
like mine, in food deserts, or with significant needs. Thank you very
much for your time and consideration.
Thank you, Chairman Thompson and Ranking Member Craig for allowing
me the honor of appearing before the Committee.
The Chairman. Well, thank you, Mr. Weinzierl. My apologies
for butchering your name when I first introduced you. Thank you
to all our witnesses. They set a great example for our Members,
well under 5 minutes. Yes. Just keep that in mind, gentlemen
and gentleladies.
At this time, Members will be recognized for questions in
order of seniority, alternating between Majority and Minority
Members, and in order of arrival for those who joined us after
the hearing convened. You will be recognized for 5 minutes each
in order to allow us to get to as many questions as possible.
I recognize myself for 5 minutes.
Dr. Newton, you did an excellent job of laying out the
current state of the farm economy, and as you pointed out,
farmers face all kinds of risk, from prices to weather, and
everything in between. With those risks in mind, why do we need
both crop insurance and Title I programs?
Dr. Newton. Thank you for the question, Mr. Chairman, and
that is, I think it is important for folks to understand that
with crop insurance, farmers have very large deductibles that
they take. Oftentimes, in excess of 15 or 20 percent of
deductible crop insurance. So, at times, farmers are taking
very, very deep losses before crop insurance ever triggers an
indemnity to the grower. And so, Title I programs have always
laid on top of crop insurance and offered a cushion in the
event of a low price or low revenue environment, like we find
ourselves in today. And so, I think it is important for farmers
to have options for risk management tools: more tools in the
toolbox so they can customize the risk management strategies
that they need.
The Chairman. Well, thank you for that.
Throughout my travels across the country, farmers have been
asking me for meaningful and robust support for Title I. Can
you explain why there has been such a focus on Title I in
particular?
Dr. Newton. Thank you again.
I think it is pretty clear from the witnesses here that
input costs have gone through the roof. Farm production
expenses hit a record $462 billion in 2022, but the support
levels that we have in the farm bill, the reference prices are
based on information, Mr. Chairman, that is over a decade old.
And so, when you travel around the country, farmers want to see
increased reference prices, higher levels of support to match
the environment that they are dealing with today with very,
very high input costs.
The Chairman. Well, thank you.
Ms. Schwertner, I appreciate you being here today, and your
willingness to share the story of your family. It is obvious
the dedication you and your husband have to the future of your
operation.
Within your testimony, you shared with us that you are
constantly looking for ways to diversify your income, but
ultimately have still had very tough conversations with your
lender. Are there others farming around you who are
experiencing the same hardships, and what will be the impact on
your community of there isn't a change in the direction the
farm economy is headed?
Ms. Schwertner. Thank you for your question.
Yes, as new and beginning farmers, my husband and I have
had some very challenging conversations with our banker, and
especially over the last 3 years as we have had consecutively
challenging years. We certainly are not alone. I think I saw
that roughly 20 percent of farmers and ranchers are having the
same conversations with the bankers across the country. So, it
certainly is a significant challenge that we face, and it is
important to note that the farm bill is not just for farmers
and ranchers. It is a rural farm bill. It is for all rural
communities, and agriculture supports rural communities. We
provide hundreds of jobs, millions of jobs to those in our
local communities. We support local businesses, the cotton
gins, the grain facilities, grocery stores, local meat
processors, you name it. We support all of those local
businesses, so the farm bill and getting across a modernized
farm bill means not just supporting farmers and ranchers, but
it means supporting the rural communities across America.
The Chairman. Well, thank you very much for that.
Mr. Talley, thank you for testifying before the Committee
today.
During my travels across--well, aside from the broader farm
economy, I have constantly heard that agriculture labor is the
number one issue affecting our producers, and that is why we--
during the last Congress--established a bipartisan Agriculture
Labor Working Group.
Mr. Talley, what has your experience with the H-2A program
been, and from your perspective, what reforms or improvements
would you consider to be a top priority?
Mr. Talley. Thank you, Mr. Chairman.
I actually had a meeting with then Secretary of Labor Chu
and had this exact conversation, and basically, I started out
by telling her in 2016, quite honestly, the H-2A program saved
our family farm. We didn't have labor. We couldn't find it
anywhere. And so, we signed up and we became part of the H-2A
program. But since then, fast forward 7 or 8 years, the cost
has gone up 30 or 40 percent. And as I explained to her, in
2024, we did some numbers. We crunched some numbers at our
family farm, and each dollar that is added to the AEWR, which
is the H-2A wage, it is a million dollars expense just in labor
costs to our farm, just instantly taken off the bottom line of
our farm. I started out saying that that likely saved our farm,
but now, that could possibly spell the demise of our farm due
to escalating wages.
The Chairman. Yes. Mr. Talley, I look forward to, offline,
having more conversations with you on that because it is a high
priority.
Mr. Talley. Thank you.
The Chairman. I now recognize the gentlelady from
Minnesota, the Ranking Member, for 5 minutes.
Ms. Craig. I am going to talk fast before we get to
snowmageddon here in Washington, D.C.
Thank you so much for your testimony just illustrating how
important it is that we get to a farm bill here in this session
of Congress.
I want to talk about that, but for a minute, I want to talk
about the threat of tariffs. I would think that many of you, as
well as other farmers, would right now be trying to lock in
your import-dependent input costs ahead of time in case those
tariffs come into effect a month from now. That urgent demand
in and of itself could cause input prices to rise even before
the tariffs come into place.
At the Senate hearing last week, we heard that suppliers of
fertilizer and other goods are not only increasing their prices
now for things farmers need, but also limiting sales for
delivery of products past specific dates because of the threat
of tariffs.
Can I ask the farmers on the panel just to raise your hand,
how many of you are taking such steps to try to avoid costs
later? Are you hearing from other farmers who are doing the
same?
Mr. Weinzierl, you are shaking your head, so if you want to
go ahead and tell me a little bit more about what is happening
out there, that would be great.
Mr. Weinzierl. Thank you, Congresswoman Craig.
So, in our case being where we are in Illinois, a lot of
the fertilizer has gone down already this fall or this past
fall. There will be some applied this spring, especially in
southern Illinois, particularly concerned with potassium
imports from our neighbors to our North. We import about 90
percent of our potassium fertilizer, which is one of the three
macro nutrients that row crops need. I think there is a lot of
concern this summer. Hopefully some of the uncertainty around
trade we work through by the time ag retailers begin stocking
up for this fall and we begin locking in contracts for this
coming season.
Ms. Craig. Thank you so much.
Let me just turn to, I guess, the question of the
conservation title and some of the money that we put into the
Inflation Reduction Act (Pub. L. 117-169) for great programs
like EQIP that farmers have access to.
We are hearing now--and it is not often they get so many
farmers on the front page of the Washington Post or other
newspapers across the country--but we are hearing now obviously
that some of the freezes that are going into effect with the
new Administration have to do with stopping REAP funding,
stopping funding for good programs like EQIP, at least putting
a pause on them.
I would just like to ask the farmers here if you sign a
contract with USDA, do you expect USDA to honor that contract?
Ms. Schwertner?
Ms. Schwertner. Yes, we do. Yes. We are currently--I am
aware of the article that you are referencing, and I have seen
that and it is certainly concerning, and for myself as a
producer, we are in the middle of EQIP contracts where we have
$100,000 of outstanding funds with projects. However, we have
never not been paid, and I am confident that President Trump--
he has said that he would take care of farmers and ranchers,
and he has held true to that promise in the past. I am certain
that we will get paid, regardless of the current freeze that
might be in place. But given the currently tight margins, it is
urgent that we figure out a path forward soon.
Ms. Craig. That is great. I am looking forward to Secretary
Rollins being confirmed so we can all have that conversation.
Anyone else have any outstanding frozen funds or know of
folks who have?
Mr. Talley. Not specifically to that, but I would like to
address the AGI limitations in the specialty crops, we are
unique where we have extremely high value crops, and so, a lot
of us can't meet that criteria.
And so, the 75 percent of income derived from agriculture,
that fits much more into the specialty crop industry and then
we are able to take advantage of these programs.
Ms. Craig. Thank you for that.
Mr. Weinzierl, I will just end--you mentioned about food
deserts. You mentioned about the need for a strong Supplemental
Nutrition Assistance Program here in the Congress. Would you
say a little bit more about how the SNAP Program impacts both
your community, and also your farm income?
Mr. Weinzierl. Well, I can definitely respond about the
need of food deserts. I am not as familiar with the SNAP
Program, but my wife and her 4-H club just had our food pantry
this past weekend, and they served about 25 families, which
would equate with 70 individuals in a small town of 700, a
population of 700. So, she has seen numbers go up.
Ms. Craig. Thank you so much. I just got gaveled on my
first set of questions, so I will yield back to the Chairman.
The Chairman. I am going to gavel 5 minutes. I think
everybody is going to get gaveled.
Ms. Craig. You gaveled yourself, Mr. Chairman.
The Chairman. You bet.
I now recognize the gentleman from Oklahoma, Mr. Lucas, for
5 minutes.
Mr. Lucas. Thank you, Mr. Chairman, and thank you to our
witnesses for testifying here today.
We will spend a lot of time in this room talking about the
negative effects of rising input costs on farmers, and our
witnesses today represent different commodity groups, different
regions of the country. But each witness listed rising input
costs as a significant problem in their testimony, whether
labor, fuel, equipment, land rent. Our farmers everywhere are
feeling the strains. So, I want to begin today by examining the
real-world impact of these costs on producers.
Ms. Schwertner, can you share with the Committee the
specific input costs that are affecting your family farm, and
while you are thinking about that, what sacrifices, if any, you
have to make to keep your farm operational?
Ms. Schwertner. Certainly. Thank you for the question.
For perspective, in 2022, we were selling cotton for
roughly $1.20, and input costs reflected that increase in
commodity prices, and since 2022, those commodity prices have
been cut in half. As I referenced in my testimony, just a few
weeks ago we got quoted 58 . Input prices have not come down in
the same manner. They have maybe come down roughly 20 percent,
but they certainly are still high, and over the course of years
and years, they have increased 300 percent, 600 percent. So,
machinery costs, seed costs is a huge one for us. Those are all
up, and commodity prices and the farm safety net don't
recognize or they don't reflect current market conditions. And
so, at the risk of accommodating those rising input costs, we
are looking at ways that we can cut back in our operation, and
generally sustainability is important for us. Conservation
practices are important for us, but in no-till situation, we
rely on chemical products to suppress weeds in our field, as an
example, and so, we are looking at ways to reduce that input
cost, and chemicals are sometimes one of the things that will
reduce, and at the risk of that, we are going in and we are
doing tillage instead of the no-till situation, which then
contradicts the conservation practices that we have tried so
hard to implement.
Mr. Lucas. And I assume it also means you are restricting
your capital investment programs? No new tractors no new barns.
Ms. Schwertner. Correct. Yes, it is hard to invest.
Mr. Lucas. It affects the family lifestyle, maybe no
vacation this summer. You got to stay home. Those are
challenges we all face.
By the way, would anyone else on the panel wish to address
that question? Since you are different regions, different
commodity groups.
Mr. Weinzierl. So, in our case, Congressman, in central
Illinois, we are pretty much in a corn soybean rotation. So,
our cost to put a crop in is probably around $700 variable
costs, $300 would be fixed costs. And so, fertilizer is about
$300 on an acre of corn, so about 40+ percent is our cost.
Beans are less, 15 percent. Nitrogen is the bulk of that $300.
What I see happening in the last several years is we are
able to build phosphorus and potassium levels in the soil, and
so, we have a little bit of a soil bank there that we can use
and so, we can back off the rates of those two types of
fertilizers. However, once you pull that nutrient out, you want
to put it back in, and anybody that saves money, it is a lot
easier to spend money than it is to save it back in the soil.
So, it is difficult and we will need good times to rebuild
those soil fertility rates.
Mr. Lucas. Mr. Talley?
Mr. Talley. We have experienced that specifically to the
fertilizer, our carton costs, our fuel. In the years 2022 and
2023, it went up anywhere from 35 to 55 percent, and the
mystery with those numbers is they really haven't gone down.
So, they go up awfully quick, and even though things have
settled down and inflation supposedly at bay, we haven't seen a
decrease. And so, we continue to pay elevated input costs.
In the years that I have been farming, which is 30+ years,
I have never seen basically across the board all of our input
expenses go up by a minimum of 35 percent. I think our highest
was around 60 percent.
Mr. Lucas. Dr. Newton, in my remaining moments, do you ever
see prices ever go down in your studies or in your life? It is
a fair question, when you are buying a tractor.
Dr. Newton. I think when you look across the farm economy,
you see, again, machinery prices are up, land prices are up,
labor prices are up. Every single input category is up across
the board, and I think we have seen some land values come down
a little bit because of where we are in the farm economy. But I
think we have entered a new level of where farm input costs are
going to be from here on out.
Mr. Lucas. As I have told the Chairman before, one of my
great observations driving back and forth to the airport coming
to D.C. from the farm is watching how much equipment is on
equipment dealer's lots.
I yield back, Mr. Chairman.
The Chairman. I thank the gentleman.
I now recognize the gentleman from California, Mr. Costa,
for 5 minutes.
Mr. Costa. Thank you very much, Mr. Chairman and the
Ranking Member, for this hearing that is very timely today,
because farmers, ranchers, dairymen and -women across the
country are hurting as a result of input costs that has been
testified here already, inflation, and other factors. And as a
third-generation farmer, I like to say here in this Committee
almost at every hearing that it is important that we remember
that food is a national security issue. It is a national
security issue. It is an international security issue as we see
most recently with the proposed cuts from USAID which is an
important part of America's smart foreign policy. That is
another issue.
But I want to focus, Mr. Talley, with you because you
represent California and the specialty crop industry. I am a
third-generation farmer, and frankly, the $59 billion last year
that was at the farm-gate in California, obviously the largest
agricultural state in the nation, which we are very proud of,
and your testimony I think reflected a number of the
challenges. You have a very good Representative in Congressman
Carbajal, we hope he will at some point be a Member of this
Committee sooner than later.
Having said that, I am not a big fan, generally speaking,
of tariffs. California farmers, as we know, are concerned about
a whole host of issues, but among the highest on the priority
list is obviously water, a reliable supply of water, reliable
supply of labor, and a fair and level playing field. And I
think the potential for tariffs with Canada and Mexico is very
problematic, not to mention other markets.
Mr. Talley, what is your concern with regards to the
general effect with our nearest neighbors? I mean, Canada is
the largest purchaser of California wines. Mexico is a large
market of California milk. The potential impacts, if we have a
full out tariff war, to California agriculture?
Mr. Talley. Obviously, thank you very much for that
question.
In a specialty crop industry, we deal with highly
perishable commodities. Some aren't so much, but I would say
the vast majority are, from maybe a shelf life of around 10
days. And so, getting into a tariff and trade war could
possibly decimate our agriculture community specifically in
California with fresh foods.
Mr. Costa. We saw the impacts the last efforts of tariffs
as leverage. Every country has that leverage, by the way, and
that is why I generally don't think that trade wars amount to
the intent of the goal ultimately of providing that level
playing field that we seek, right?
Mr. Talley. Correct.
Mr. Costa. And so, let's go on, because we know the last
time we went down that road, the Commodity Credit Corporation
really ended up providing a subsidy, a floor for a lot of ag
production, especially in the Midwest. Specialty crops, though,
did not benefit from that, is that correct?
Mr. Talley. Once again, the AGI seems to always be the
issue for us, and that is why that 75 percent of income derived
from farming income is imperative.
Mr. Costa. Well, and also when you look at it, and you
noted it and others did in their testimony, the cost of crop
insurance--and of course, we haven't set the production costs
since 2010. We hope to rectify them in the farm bill--and by
the way, I hope there is bipartisan support on the
reauthorization of the farm bill. We all need it throughout the
farm bill, would you not agree?
Mr. Talley. Yes.
Mr. Costa. So, how do we make the crop insurance effort
more user-friendly to the specialty crop industry, which by the
way, is not just California, but is spread around the country?
Mr. Talley. Absolutely, in all 50 states.
Like I said, the specialty crop industry is so unique,
specifically in its insurance needs. Right now, we are not
really able to utilize that, in my mind, to its fullest because
we do need to revamp that, and the specialty crop industry
would be more than happy to sit down and discuss this with the
USDA, and unfortunately, I don't think we have time right now
to go through it item by item, but it is something that we feel
that can be utilized as a safety net, not only for us
personally. We use it in our lemons and avocados.
Mr. Costa. Mr. Talley, I couldn't agree with you more, and
as a third-generation farmer, I think we need to do a better
job in educating specialty crops after all, are the food that
we all love to eat, right?
Mr. Talley. Correct.
Mr. Costa. Fruits and vegetables and the protein. I mean,
we say they are special, but they are the common food that
Americans have on their dinner table every night that farm
workers and farmers do to make it happen.
Mr. Talley. Correct.
Mr. Costa. Thank you. My time has expired. Mr. Chairman,
more to be continued.
The Chairman. All right, I thank the gentleman.
I now recognize the Vice Chair of the full Committee, the
gentleman from Georgia, Mr. Austin Scott, for 5 minutes.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and
we, too, wanted to get a broad bipartisan farm bill done. I
will tell you, I do think that we have to put the farm back in
the farm bill, and I think that production agriculture should
receive more than ten percent of total farm bill spending. And
I think until we get to that point, just rural America's
economy is going to continue to suffer until we have adequate
support.
That said, on just over a year ago, Secretary Vilsack
testified before this Committee, claiming that the previous 3
years of net cash income were the best 3 years in 50 years. And
I am quoting him there, ``The best years for net cash income
ever.'' He simply glossed over the 2023 number at the time,
which we already had. Now, we have 2024 and we have estimates
for 2025.
So, Dr. Newton, the USDA's latest farm income report shows
a sharp increase in net farm income for 2025. Are you familiar
with this report?
Dr. Newton. Yes, sir.
Mr. Austin Scott of Georgia. It is largely driven by
economic and disaster assistance is where the increase in
income comes from, is that correct?
Dr. Newton. That is correct.
Mr. Austin Scott of Georgia. And if you follow the numbers,
$42.4 billion, or 23.6 percent, of net farm income is expected
to come from disaster or assistance payments. Is that correct?
Dr. Newton. Yes, sir.
Mr. Austin Scott of Georgia. And so, for America, the
reason that number is so high--and this is what I am so
concerned about, and I will just read this from the Farm Bureau
report.\1\ ``This anticipated increase in ARC and PLC payments
is primarily due to projected declines in commodity prices. For
example, USDA projects the 2025 marketing year average price
for corn to be $3.90 per bushel, which is below the effective
reference price of $4.26 per bushel.'' And it goes on to name
some other commodities in there as well.
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\1\ Editor's note: the Market Intel article entitled, Disaster
Assistance Fuels 2025's Farm Income Rebound, is located on p. 131.
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So, we have tough years ahead of us. We had a tough year in
2024. We had a tough year in 2023. Can you just speak to what
you think we would have seen if Congress had not acted to
provide the economic and natural disaster assistance to farmers
the last month of 2024?
Dr. Newton. Thank you very much for the question. I mean,
we have seen tight margins now in farm country for 3 straight
years in a row, and the ad hoc support that you mentioned
unfortunately is not going to make anyone whole, even with that
support, even with the support from ARC and PLC. We are still
looking at farms that it is going to be a tough time to break-
even. So, I think this is helpful assistance as we have heard
from the Committee, but we need a new 5 year farm bill. We need
a modernized farm bill so that farmers have the tools that they
need in the toolbox to manage risk in today's farm economy.
And I have said all the time when I travel the country, our
farm safety net is broken. It does not work the way it needs to
work, and that is why we have had to rely so heavily on ad hoc
support. By my estimates, over the last 6 years we have had
about $130 billion in ad hoc support that has gone out the
door. ARC and PLC, those programs that you mentioned, have come
in at about $20 billion. So, we are a 6:1 ratio between ad hoc
support and the support we get from farm bill programs. That is
why the safety net needs to get modernized.
I appreciate the question.
Mr. Austin Scott of Georgia. The reference prices no longer
reflect the cost of production for America's farmers.
Dr. Newton. Absolutely not.
Mr. Austin Scott of Georgia. And I will tell you, I am
concerned that they are moving so fast that I truly think after
this farm bill we probably need to get to a 3 year cycle and
not a 5 year cycle on the farm bill, because of the speed at
which things are changing.
Dr. Newton, I will just stick with you since I am down to 1
second. I am from south Georgia. Can you just talk about what a
downturn in the overall ag economy means for all of the
businesses and rural America in general?
Dr. Newton. We heard it from the witnesses. The farm
economy supports the rural economy. It supports rural main
street, and when farmers are not making money, there are no
turn-back dollars that go back into the economy. You lose jobs.
You lose schools. You lose health care. So, the farm economy is
the backbone of the rural economy.
Mr. Austin Scott of Georgia. I only have about 20 seconds
left, Mr. Chairman, but in most of the counties that I
represent, the farmers are the ones that are paying the taxes
that support the local government, the school system, police
departments. If the local farmers can't make their ends meet,
then nobody else is making their ends meet either in rural
America. So, we too want to get a good farm bill done, but it
has got to be more than ten percent for production ag.
The Chairman. I thank the gentleman.
I now recognize the gentleman from Massachusetts, Mr.
McGovern, for 5 minutes.
Mr. McGovern. Thank you, Mr. Chairman.
My farmers tell me that uncertainty complicates and
frustrates their livelihoods, and we are living in a time of
great uncertainty. Just for the record, I don't think we can
pretend like the last 3 weeks haven't even happened. We can't
ignore what this Administration is saying and doing.
Mr. Chairman, the state of the rural economy in this
country is declining by the minute because Donald Trump has
decided to let Elon Musk put billionaires first and America
last. I mean, come on. Tariffs against our closest allies and
ag trading partners, gutting science programs while bird flu
rips through poultry and livestock, freezing money that has
been promised to farmers for ongoing projects. Do my colleagues
really think these are good for rural America? Trying to
illegally purge the career staff at USDA, who we all know try
to help rural communities, demagoguing programs that provide a
legal immigrant workforce for our farmers, destroying global
food aid programs that our farmers rely on every day to sell
what they grow and produce. These things are not America first.
These are policies of people who do not care about rural
America at all. So, let me just say this as clearly as I can,
Mr. Chairman. The rural economy of this country is in big
trouble, unless things change.
Now, let me make this as simple as I can for people. USAID
purchases $2 billion--that is billion, with a B--worth of U.S.
commodities every year grown by who? Grown by American farmers.
That is soybeans, rice, wheat, sorghum, the vast majority of
which are grown not in my district, but in your district, in
red states, in many of your districts. And then some weirdo
named Elon, who has probably never set foot on a farm in his
life, just decided to end it all, to eliminate entire markets
for our commodity growers while prices are already low. And
spare me the rebuttal of food aid was exempted from Elon's
shutdown. That is BS. We are hearing from people on the front
lines that that is BS. Even the USAID Office of the Inspector
General just said yesterday, and I quote,\2\ ``[U]ncertainty
about the scope of foreign assistance waivers and permissible
communications with implementers, has degraded USAID's ability
to distribute and safeguard taxpayer-funded humanitarian
assistance.'' So, more than 475,000 metric tons of American
food commodities valued at $450 million that were scheduled or
in transit are now at risk of being wasted, and more than
29,000 metric tons of food commodities valued at $39 million
are sitting on the floor of USAID warehouses in Houston. And I
am hearing reports of the so-called waiver of food aid is not
helpful because these waivers are impossible to obtain. The
freeze is already having dramatic consequences on rural
communities. Companies that buy massive amounts of soy and
peanuts to treat childhood malnutrition are shutting down, and
these shutdowns are going to hit rural America like a ton of
bricks.
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\2\ Editor's note: the USAID OIG Advisory Notice entitled,
Oversight of USAID-Funded Humanitarian Assistance Programming Impacted
by Staffing Reductions and Pause on Foreign Assistance, is located on
p. 139.
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So, I am just saying to my Republican colleagues, is this
what America First means to you, sticking it to your own
farmers by ripping the rug out from under them? Great job. I am
sure you will go on TV talking about how great Trump is while
he totally screws over the people we represent.
So, with that, I have a question for Mr. Weinzierl that I
hope you can answer quickly, a simple yes or no is fine. If
USAID is successfully dismantled and stops buying commodities
for global food aid at over $2 billion, would that have a
ripple effect on the farm economy, and do you think it would
create uncertainty for our farmers?
Mr. Weinzierl. I do. I am not an expert in this area. There
are a couple programs in USAID that I do see of value which you
mentioned one, the commodities, soy and there is actually a
corn/soy mix. I don't know if the amount there would be
effective of the price, but I think that is important.
Mr. McGovern. Right, but I mean, common sense tells you if
$2 billion is taken off the table which is used to purchase
farm commodities, who makes up that market?
Let me just say one other thing, Mr. Chairman. We have 47
million people who are hungry in this country, and I had hoped
that America First meant that we were going to try to feed
them, but I guess I was wrong because I hear that the
Republican leadership is still pursuing $150 billion in cuts to
SNAP to give more handouts to billionaires. I would like to
point out that some of the poorest counties in the country are
in rural America, and among the largest number of eligible SNAP
beneficiaries live in rural America, and the majority of them,
by the way, they work. And I didn't come to Congress to
increase hunger in this country. I came to Congress to end it.
I think I am out of time, but we can't ignore what is
happening in our country as we speak. There are some really bad
things, some bad decisions that are being made that we have to
speak out against.
The Chairman. I thank the gentleman.
I now recognize the gentleman from Arkansas, Mr. Crawford,
for 5 minutes.
Mr. Crawford. Thank you, Mr. Chairman.
I want to talk about something I have actually worked on
for several years, and it may come as a surprise to you that
you are hearing about this for the first time. But with much of
the farm economy in crisis from natural disasters to economic
disasters, I believe we ought to be looking at different
options that allow producers to exert more control over their
own operations. That is why several Congresses ago, and again
in this Congress, I introduced the Farm Risk Abatement and
Mitigation Election Act, or FRAME Act.\3\
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\3\ Editor's note: as of the publishing of this hearing the bill
referenced has not been introduced during the 119th Congress. Prior
introductions: 113th Congress, H.R. 1614; 114th Congress, H.R. 6167;
115th Congress, H.R. 1400.
---------------------------------------------------------------------------
In my bill, FRAME accounts would be like HSA for farmers in
that producers could make tax-deductible contributions up to
$50,000 per year to basically save for a rainy day, such as now
when they could draw from their account and not have to wait on
government payments that may or may not come in time.
Dr. Newton, just hearing about the idea of an HSA for
farmers along this--I am just throwing this at you. You might
have heard about this before. Do you think this is beneficial
to farmers across the country?
Dr. Newton. Thank you for the question, Mr. Crawford, and I
recall fondly the time that we spent with the Arkansas Ag
Council when I was with Senator Bozeman's office. It is nice to
see you again.
This is a topic that we explored when I was at Farm Bureau
many, many years ago, and I think that the challenge that we
face with this is farmers have to have money before they can
put it in an HSA-type account. And where we are with the farm
economy today, the downturn that we are in there is not a lot
of money to put into that type of account. But there is value
to that concept that you can tuck away some money during good
times to help offset the downturns in the farm economy that we
face.
Mr. Crawford. Well, and to your point, look, a disaster in
certain parts of my district may never be declared, but it is
no less a disaster for those farmers. It could be that maybe
another farmer sprayed something off label and did damage to
their crops, and they have to have some support for that. That
is kind of at the micro level. I mean, it is not just a macro
type of approach to this.
And you said we got to have funding to be able to fund
those accounts. I get it, but every farmer that I have talked
to in my district about this has, without exception, said,
``Yes, where do I sign?'' The other upside of this is that
banks actually get to administer these accounts, and so, that
is putting money in banks and so on.
But to your point, I get it. The current state of the farm
economy, this isn't a situation that everybody is going to be
rushing out saying, ``Yes, let me put $50,000 into my FRAME
account.'' Had we had the foresight 10 years ago to do this,
now those FRAME accounts would probably be beneficial.
So, it is always the situation where we are fixing the roof
while it is raining, and I think we need to take that into
consideration that yes, we are not going to fund these accounts
today, but we should see this as an opportunity to recognize
that this won't be the last time this ever happens, and so, we
should be thinking long-term about what we do to empower
farmers to help control their own destiny as it applies to
their ability to mitigate a potential disaster while they are
waiting for either a crop insurance adjustment or a disaster
declaration and the associated funding. So, I hope that you
will consider that and lend your support to the effort,
although it is too little too late today. But I am worried
about the next one, and it is not if, but when, and how bad,
and most people in agriculture will tell you that as you well
know, and I am concerned that we are going to lose an awful lot
of farmers in Arkansas's 1st Congressional District in this
cycle, and maybe this could have helped prevent that and maybe
it can help prevent the next round as it applies to that.
So, I appreciate you all being here today. I won't belabor
the point, but just to say that we need to get past the
standard reactionary posture and start thinking a little more
proactively about what we do for the next one.
I appreciate it, and I yield back.
The Chairman. The gentleman yields back.
I now recognize the gentlelady from Ohio, Ms. Brown, for 5
minutes.
Ms. Brown. Thank you, Chairman Thompson and Ranking Member
Craig, and thank you to our panelists today. Your comments have
been very insightful.
I am glad that all of us on this Committee agreed that we
are living through very uncertain times, from reckless tariff
threats and sudden USDA funding freezes that disrupt vital farm
programs, to looming cuts to critical nutrition benefits. The
current Administration is keeping the entire food and farm
supply chain in a constant state of uncertainty.
From farm-gate to the dinner plate, these policies are
destabilizing the very systems that farmers, families, and
communities rely on, and we have seen this story before. Four
years ago, Trump's tariffs and trade battles, particularly with
China, left many U.S. farmers struggling to sell their crops,
leading to record high farm bankruptcies and closures. While
bailout payments were issued to offset some of the damage, they
failed to provide a sustainable solution or address long-term
losses in market share.
This is why passing a farm bill is so important. Last
Congress, I was Ranking Member of the General Farm Commodities,
Risk Management, and Credit Subcommittee, and the number one
thing I heard from farmers was the desire for a strong, up-
front investment in our farm bill risk management and Market
Access Programs. And let me clear. Investing in agriculture
doesn't just mean pouring resources into the largest, most
traditional commodities. It means ensuring stability and
opportunity for all farmers, including small-scale producers,
specialty crop growers, urban farmers, and those using
innovative, non-traditional methods. A strong farm economy
requires certainty for every farmer, not just the biggest
players.
Mr. Talley, you are a specialty crop grower and it is my
understanding that specialty crops do not qualify for Title I
programs, and that most specialty crops don't have access to
crop insurance today. So, I would like to get a better
understanding of what improving the safety net would mean for
growers like you. What are some of the changes that should be
made to crop insurance programs to encourage access, improve
coverage, and ultimately make the industry more resilient?
Mr. Talley. Thank you.
Yes, and I alluded to that answer a little bit before with
Congressman Costa where it is a situation where, especially
where the crops are so diverse and our needs are so unique,
that we need to revamp the insurance program, the crop
insurance program. And we are willing to sit down with the USDA
and go over some of the improvements that may need to occur.
I know like I stated, we currently have crop insurance on
our lemons and avocados, and that seems to work in that regard,
but when you talk kind of across the U.S. with specialty crop
growers, right now the system is a little clunky and it is
difficult to use, and there is a lot of uncertainty as to
limits and that sort of thing. And I just think going in,
revamping, clarifying, and perhaps explaining things a little
bit better would make it more user friendly and allow people to
be part of this safety net, which is invaluable.
Ms. Brown. Thank you.
I also want to make a point that when we talk about the
uncertainty of the farm economy, we often talk about it in a
global sense. But the reality is, this instability doesn't just
impact farmers, it affects every American consumer, especially
those who rely on programs like SNAP to put food on the table.
When grocery prices at the store are driven up, it makes it
harder for working families, like the almost one in four SNAP
households in my district, to afford fresh, nutritious food.
Mr. Weinzierl, how does economic uncertainty in the farm
sector, whether from volatile input costs, supply chain
disruptions, or policy changes, directly impact food prices and
access for low-income consumers, particularly relying on SNAP?
Mr. Weinzierl. So, again, I am not a SNAP expert, but
anytime you have uncertainty, you have much more volatility on
prices, commodities, and the food products that are made from
those commodities. So, yes, that uncertainty a lot of times
will drive higher prices.
Ms. Brown. Dr. Newton, perhaps you can add something to
that?
Dr. Newton. Absolutely. I mean, I think if you look at what
is driving the inflation in grocery prices, I mean, a lot of it
is labor which is a big cost of grocery prices. Obviously we
are dealing with a historic outbreak of avian influenza that is
driving egg prices higher. So, absolutely inflation in food
prices impacts the ability for Americans to purchase food.
Ms. Brown. Thank you very much. I look forward to working
with my colleagues on this Committee to write a farm bill that
offers farmers and families the certainty they need to keep our
food supply chain strong and resilient.
And with that, Mr. Chairman, I yield back.
The Chairman. I thank the gentlelady.
I now recognize the gentleman from North Carolina, Mr.
Rouzer, for 5 minutes.
Mr. Rouzer. Thank you, Mr. Chairman.
The question of food aid and USAID came up a few minutes
ago. I just want to say, it has always been my position that
food aid should be under USDA, not USAID. So, that is all I am
going to say about that for right now.
Dr. Newton, your testimony references a 28 percent decline
in net cash farm income for hog producers since 2022. Can you
speak to the impact of California's Prop 12 and what effect
that has had in the regard?
Dr. Newton. Certainly, and I believe that USDA's Office of
the Chief Economist has published an excellent report on the
impact of Prop 12. But it has certainly driven up and we just
talked about the impact of grocery prices for Americans. It has
driven up pork product prices in California. But when you talk
about the decline in hog farm income, it has been one of the
toughest times for hog producers in this country. They are
slightly recovering now, but over the last few years, it has
been pretty devastating.
Mr. Rouzer. Switching gears slightly, in the Southeast in
particular with specialty crops, labor-intensive crops, what
percentage of input cost is labor?
Dr. Newton. I can't speak to the exact percentage of what
input costs are. Maybe Mr. Talley can, but I can tell you that
labor costs have increased probably about 50 or 60 percent
since the last time we did a farm bill.
Mr. Rouzer. Mr. Talley?
Mr. Talley. Yes, and labor costs anywhere from 46 to 50
percent of the expenses related to growing specialty crops.
Mr. Rouzer. Mr. Weinzierl, last Congress you opposed this
Committee's farm bill from the position that it advantaged
southern producers over others. Is that an accurate portrayal?
Mr. Weinzierl. I think what we were hoping for is some
improvement in Title I. As I look at the projections of the
bill, we have lost about $200 per acre, corn bean acre. Corn is
around $288 over the last 3 years. Beans are around $140+, and
the changes that were being talked about would have been
probably around $20 an acre in change, and we were just trying
to look for ways to better improve the program, and especially
we were focused on Title XI.
Mr. Rouzer. So, many of my producers in North Carolina are
unable to access low premium crop insurance coverage, and have
very different risks associated with growing their crops. And
of course, the farm safety net and farm programs protect their
ability to feed and clothe the world.
As I understand it, and correct me if I am wrong, what
percent of the corn market is due directly to the RFS? Forty
percent? Is that about right?
Mr. Weinzierl. So, from a net standpoint 27 percent, but 40
percent of the corn goes into ethanol and then DDGS is sold not
only in the U.S. as a co-product, but also throughout the
world.
I would say the ethanol market we believe is in decline
right now, and that is one reason why we are advocating for
another generation of biofuels policy around a high-octane fuel
standard.
Mr. Rouzer. What would the industry look like without the
RFS?
Mr. Weinzierl. I think the industry demand, from a corn and
bean standpoint, is everything. I believe that when the RFS
passed, it not only impacted corn, soybean farmers, really
affected all row crops just because of the demand for acres
around biofuels.
So, anything we can do that will turn that around from a
corn standpoint will actually help, we believe, all row crops.
Mr. Rouzer. Dr. Newton, if you did not have the RFS, what
would the price of corn be today, just a general estimate, if
you can?
Dr. Newton. That is probably tough to calculate on the fly.
I would be happy to get back and answer that question.
But, you chew up 30 percent of the corn crop as a demand
point, it certainly helps to support the prices.
Mr. Rouzer. Yes. Well, the broader point here--and I will
just give an example. My integrators, they don't like ethanol
at all. They utilize corn and other crops, obviously, for feed,
and the broader point I want to make is, there is not enough of
us to be opposed to each other. We all have to pull together.
We have to get a farm bill done, get it done this year, and we
all need to be united in that effort in its totality.
With that, Mr. Chairman, I yield back.
The Chairman. I thank the gentleman.
I now recognize the gentlelady from Oregon, Ms. Salinas,
for 5 minutes.
Ms. Salinas. Thank you to Chairman Thompson and Ranking
Member Craig, and thank you to all of our witnesses today.
I think a lot of folks in this room know that Oregon
farmers produce over 220 recognized commodities. We are home to
diversified nurseries, berries of all kinds, and grapes and
hops that make some of the country's finest wine and beer. We
even produce about 99 percent of America's hazelnuts, so
clearly, specialty crops are foundational to Oregon's
agricultural economy.
My district is home, as I just mentioned, to some of the
finest wine grapes in the world, and Canada is by far the
biggest export market for Oregon. In the wake of President
Trump's tariff announcement, Canadian leaders took a variety of
retaliatory actions immediately, starting on last Monday,
including pulling American alcohol beverages like Oregon wine,
off of shelves across their country. And wineries in my
district immediately heard that prescheduled orders were being
canceled, that their products would no longer be prioritized,
and that their Canadian partners could no longer trust that
they could rely on a stable trade partnership with U.S.
exporters.
Whether the impacts are on end products like wines, or
commodities themselves, a trade war with Canada and our other
largest trading partners would have severe consequences for
U.S. producers and clearly for those of us in Oregon.
So, for Mr. Talley and Dr. Newton specifically, how badly
would retaliatory tariffs from our trading partners harm
farmers' bottom lines? And then further, how difficult is it to
regain access to a market following a trade war if another
competitor has already stepped in and entered that marketplace
to meet that demand?
Mr. Talley. I will tell you, it is difficult to determine
basically what would happen if tariffs--and then retaliatory
and we go back and forth. But as I had stated before, it is a
concern because retaliatory tariffs typically affect specialty
crop industry, and unfortunately, we don't have the shelf life,
we don't have the legs to withstand something like that.
And so, I recall last time that USDA came up with some
funding to help farmers, specialty crops, for instance, and
that is something that we may be looking to the USDA to
implement if need be. But it is a concern, and there is no
doubt about that. And it is something that we are watching
closely.
Ms. Salinas. Thank you. Dr. Newton, would you like to
respond?
Dr. Newton. I agree entirely.
Ms. Salinas. Okay, thank you.
So, one last question before my time expires. We have heard
a lot this morning about labor costs, and I am hearing it from
my growers as well. What would happen--and I recognize that we
don't have a lot jurisdiction here in this Committee--but what
would happen if 11 million undocumented workers across the
nation were removed as President Trump has alluded to? What
would happen to the cost of labor in agriculture in the United
States? Dr. Newton?
Dr. Newton. I mean, with 42 percent of crop farmworkers
undocumented, I think it would be very disruptive to the ag
sector if they were to all of a sudden be removed. Hopefully it
doesn't come to that, and I think that is where our perspective
in the analysis is just evaluating these things as they occur,
and that hasn't happened yet.
Ms. Salinas. Would anyone else like to respond?
Mr. Talley. I agree with Mr. Newton, and also, that really
emphasizes the portion of the farm bill that specialty crops
really rely on, and that is the mechanization and
automatization of our crops any sort of labor-saving device
that we can create, not necessarily replacing labor, because we
are not going to replace them all together, because there is no
silver bullet. But to make consistent improvements through
mechanization to help save our labor force, it is imperative.
California spent over $16 billion last year in labor. Two-
thirds of that was just in harvesting. Harvesting is one of the
most difficult factors in row crops, specifically specialty
crops, and it is a concern that obviously impacts agriculture
tremendously.
Ms. Salinas. Thank you. I yield back.
The Chairman. I thank the gentlelady, and I now recognize
the gentleman from Illinois, Mr. Bost, for 5 minutes.
Mr. Bost. Thank you, Mr. Chairman. So, I want to thank
everybody for being here today.
Over the last few years, American farmers have faced a
number of challenges. We have seen end costs rise, inflation
double, and crop prices drop. A few of you have noticed and
noted in your testimony that this job isn't really cheap. There
is a lot of investment that goes on into this career, and our
new and beginning farmers often rely heavily on loans. However,
access to credit loan limits can be a roadblock to these
farmers. By expanding the FSA loan limits, we can provide new
and beginning farmers with the ability of one, get into
agriculture, and two, remain competitive in the market.
I was happy to see the provisions included in the 2024 Farm
Bill and was proud to support it.
Dr. Newton, can you speak to the importance of expanding
and streamlining credit programs for producers who struggle
with access to credit?
Dr. Newton. It is the next generation to come to the farm.
I mean, anything to make farming easier, access to credit,
improved risk management tools, the list is long to help those
come back to the farm.
Mr. Bost. And as we think about the farm economy, the
impact on farm income, I would be remiss if I didn't mention
that an issue from California called Prop 12. While primary
impact on this is in the hog industry, it has far-reaching
implications for ag economy for the--over the whole situation
in our ag economy.
Mr. Weinzierl, in May of last year, 900 ag organizations,
including the Illinois Corn Growers, committed to support the
preemption of Prop 12 to be included in the House farm bill. As
you know, Prop 12 threatens to consolidate the pork industry
and raise prices for consumers. Why would the corn growers be
concerned about this?
Mr. Weinzierl. Thank you, Congressman.
Of course, I had mentioned that livestock is a very
important market for us. They are actually our largest market.
The pork industry is--Illinois produces number four in pork
production, and we already heard on the impact of what Prop 12
could do. So, anything that helps our livestock customers is
very important to us.
Mr. Bost. So, those are the questions that I had written
out before. Now, we are going to go into something else.
Let me ask something of each one of you. Now, let me get
this right. I know, Rodney, you are--and Ms. Schwertner--I want
to say it correctly.
Ms. Schwertner. Schwertner.
Mr. Bost. Schwertner. You are actually farming yourself.
The other two, you are farming yourself, both of you?
Mr. Talley. Yes, I am farming.
Mr. Bost. Doctor? Okay. Then I will ask the three of you.
Have you felt secure in the last 4 years in the ag industry?
Ms. Schwertner. No.
Mr. Talley. I would say in California, since 2017 to 2022,
we have lost over 7,000 farms and that amounts to about 300,000
acres that have gone fallow. That pretty much answers my
question.
Mr. Weinzierl. From a financial standpoint as we look at
the three demand sectors in corn, none of those sectors are
very healthy. If there is one bright spot, however small, it
would be ethanol exports, actually, to Canada, as our largest
customer.
Mr. Bost. Still, from the USMCA deal that was done during
the last Trump Administration.
I have watched my colleagues on the other side of the aisle
over this morning, many of them try to bring up the fact that
they are concerned over the last 3 weeks. Now, we just heard
they have been concerned over the last 4 years.
Now, if we really want to talk about the problems that
exist in agriculture, it is not based on these last 3 weeks. It
is based on the fact that, one, we need to get a farm bill
passed--there is no doubt--and give you that security. But the
reality of ag is that what we have been doing for years--and a
lot of our trade has basically hurt our farmers, and our worst-
case scenario, if you really study this issue, has been China,
who actually plays games with the industry, offers a price on
beans, says they are going to take it for that amount, and then
comes back and overloads the market where their prices drop
where many farmers are broke. So, obviously our trade deals
have not been really, really, really good.
I came from a background in ag business, and I came from a
background also in politics that I was opposed to trade
agreements. But the reality is we have been failing, and if we
are willing to step forward--and if you are just going to
complain about the last 3 weeks, we have a lot to look at. I
would hope that this Committee would back away from the
partisanship and actually come together, pass this farm bill,
and realize that trade--we should hold accountable those
countries we are dealing with and get our trade deals right,
and hold their feet to the fire.
And with that, I yield back.
The Chairman. I thank the gentleman.
I now recognize the gentlelady from Illinois, Ms.
Budzinski, for 5 minutes.
Ms. Budzinski. Yes, thank you, Mr. Chairman. Thank you,
Ranking Member.
I have prepared remarks, but I do want to just pick up on
my colleague, Mr. Bost, in talking about trade, and just ask a
quick question of the panelists before I talk a little bit
about my district.
President Trump has proposed ten percent tariffs on Canada,
specifically on energy imports, and I know potash, I hear a lot
about input prices, and he has paused that for 30 days. But I
would like to ask each of the panelists if that ended up being
imposed, this ten percent tariff on Canada for energy imports,
would that help create more certainty and help our farmers? Yes
or no, and I would like to go--starting with Dr. Newton and
answer a yes or no question to that. Answer.
Dr. Newton. No.
Ms. Schwertner. No.
Mr. Talley. No.
Mr. Weinzierl. No.
Ms. Budzinski. Okay, thank you.
To all of our witnesses, I want to say thank you for being
here today. Illinois's 13th Congressional District is the home
to some of the most fertile soil in the world, and it is home
to over 900,000 acres of corn and soybeans alone. The thing I
hear most from the hardworking farmers in my district is that
in order to manage their operations during these hard economic
times, what they really need is a strong safety net. Many of my
farmers enroll in Title I programs like ARC and PLC, but
neither is a reliable form of risk management for them. Farmers
in Illinois's 13th rely on crop insurance as their primary risk
management tool, but there are serious concerns about whether
or not the Federal Crop Insurance Program is serving my farmers
as well as it can be.
In fact, from 2018 to 2022, Illinois farmers paid over $500
million more into the program than they received from it.
Meaning they are negative net beneficiaries of the program. In
a time of rising uncertainty for farmers with tariffs being
levied, tariffs being threatened, grant rescissions, and other
extreme power grabs by the Administration, we need these
programs to work now more than ever. Especially since prices
are low and costs are high. I want to focus on how we can curb
the uncertainty through the farm safety net.
Mr. Weinzierl, based on your testimony, I understand that
crop insurance is your primary risk management tool. For your
operation, is crop insurance functioning at the 1.0 level?
Mr. Weinzierl. No, it is not.
Ms. Budzinski. Do you believe that crop insurance is a
sustainable investment for your operation?
Mr. Weinzierl. I believe with changes that I think are
needed, it is a very important part for our operation and also
for many of the producers throughout Illinois.
Ms. Budzinski. And my final question, Mr. Weinzierl, is
regarding the economic assistance that was passed by Congress
at the end of last year. With significant bipartisan support,
these payments are being made on planted acres. Crop insurance
operates on planted acres, as you know, but Title I payments
pay out on base acres, leading to the potential for payments on
acres for commodities not even grown. Do you believe that
payments on planted acres is a more thoughtful approach to
commodity assistance?
Mr. Weinzierl. So, I think we had some apprehension
relative to that program, but on reflection, planted acres
really aligns well with addressing the input costs that are
affecting us on the crops that we are growing right now, and
with the payment structure being moved up, the payment is going
to hit when it needs to hit, not a year after our marketing
year.
So, I think it is worth the Committee considering trying to
figure out how to reset, align Title I to be more responsive.
Ms. Budzinski. Okay, and my last question is do Title I
payments sustain your operations?
Mr. Weinzierl. We, over time, have received very little
Title I. We probably won't get anything in 2024. Possibly in
2025 there might be a Title I payment, but it is not in our
budgets from a cash-flow standpoint and our lender wouldn't
expect it or wouldn't want it to be in our cash-flow
statements.
Ms. Budzinski. Thank you, and I yield back, Mr. Chairman.
The Chairman. I thank the gentlelady.
I now recognize the gentleman from South Dakota, Mr.
Johnson, for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman.
I am going to pick up, Mr. Weinzierl, where my colleague,
Ms. Budzinski, left off.
Illinois has a lot of planted acres that are not eligible
for the Title I program she was talking about, but Illinois
certainly is not alone on that front. I think you all are in
the top five, but there are a lot of states similarly situated.
So, kind of peel back some of the onion. Give the Members
of the Committee some sense of why is it a problem when you
have this discrepancy between how Title I covers the
countryside in Illinois and it is not connected to recent
history of planted acres.
Mr. Weinzierl. So, original acres used for Title I was from
1980 to 1983, so my dad was farming. I was helping with that.
There has been a couple of opportunities to update those acres.
We actually updated ours back in 2014 to reflect our recently
planted acres of both corn and soybeans. But in some cases, my
daughter, she is going to have to live with what my decision
was in 2014. There are many farms that are living with the
decisions made by their grandparents.
Looking at the very important ad hoc that you guys helped
support and move last fall, using recently planted acres really
helps the producers deal with the costs that they are getting
involved with and dealing with, because it is currently what
they are dealing with from a cost standpoint on the crops they
are growing.
Mr. Johnson. And I know you are an expert on growing stuff
in Illinois and not necessarily growing stuff in South Dakota,
but I mean, clearly the corn belt has pushed pretty
substantially west in the years since your father would have
made those selections.
Is this an issue that is exacerbated as you move closer to
the middle of the country?
Mr. Weinzierl. So, from our region, we have probably--well,
it has actually affected us on our crop insurance ratings. We
have probably lost about 2 million acres to beans, which if you
are familiar with corn/bean rotation, there is tremendous
synergy in the two crops alternating every year from an
agronomic standpoint, from a yield standpoint. And so, again,
those bases don't reflect that update.
Mr. Johnson. Yes, and I would only observe that, again, we
have seen quite a transformation in the middle of the country
as corn and beans, that kind of rotation has purchased acres.
The Missouri River cuts South Dakota in the middle. It used to
be you would just never imagine having a large corn or bean
fields in that middle part of the state, and now you really do.
And so, similar to the kind of problem you have in
Illinois, in South Dakota you have an even bigger problem, in
that you have selections, elections, data, decisions made by
somebody's dad or grandpa that have no real connection to the
decisions they are making today about what grow. And it does
mean that Title I is really out of alignment with what we need.
Now, you had mentioned you had some apprehension at the
beginning of the policy formation process. I think you said
those concerns have been alleviated. Did I hear that right?
Mr. Weinzierl. Yes, and my concerns relate to in a
downturn, it is really--when farmers don't have money, they
can't pay for the input costs, and input costs tend to be very
sticky. And it takes a downturn to force those input costs
down. And our apprehension is if absentee landlords who, a lot
of times, live in metropolitan areas, see that money is flowing
back, they are not as quick to lower the cash rent payments
that they are asking for from their tenants. But the need was
there, and that kind of overcomes that. But we are going to be
carrying higher costs into the next year because that downturn
is not pushing input costs down.
Mr. Johnson. Well, there are lots of differences between
growing stuff in your neck of the woods, Ms. Budzinski's neck
of the woods, and my neck of the woods. You all get yields that
it is just unbelievable. You get it easy. I know it doesn't
really seem easy to you, but you get yields sometimes twice
what we get.
But one serious area of commonality, of agreement, is that
we should be using good data to drive policy decisions and
Title I coverage.
With that, Mr. Chairman, I would yield back.
The Chairman. I thank the gentleman.
I now recognize the gentlelady from Connecticut, Mrs.
Hayes, for 5 minutes.
Mrs. Hayes. Thank you. Good afternoon, and thank you to our
witnesses for being here today.
Connecticut farmers have faced prolonged droughts, late
season frosts, hailstorms, tornadoes. Even this summer we had a
weather phenomenon called a wet microburst. Unpredictable and
damaging experiences that I am sure the farmers on the panel
have likely shared.
Fortunately, we got critical disaster relief for farmers in
the continuing resolution passed by Congress in December. The
CR established the Farm Recovery and Support Block Grant
Program to ensure that small- and medium-sized farmers, like
the ones I represent in my district, farmers who are often
overlooked by farm safety net programs, receive some sort of
assistance. This program will provide critical resources for
states to distribute to producers. The Connecticut Department
of Agriculture is working tirelessly to use this program to
help as many producers as possible.
Mr. Talley, as you know, ad hoc assistance has been
provided for specialty crop producers to address the gaps in
the farm safety net program. However, because this type of
support relies on the prevailing political climate, ad hoc
assistance is never guaranteed. Can you talk to the Committee a
little bit about how this type of ad hoc assistance
distribution impacts your operations when determining
contracts, input purchases, and other investments, and in your
view, should Congress develop an alternative to providing
assistance in a more predictable way for producers?
Mr. Talley. Thank you, Congresswoman.
As I had stated before, the assistance is kind of
intermittent, and it is not necessarily consistent. And the
difficulty that we face in the specialty crop industry is that
the AGI limits, a lot of times we are not able to really
utilize these programs through the USDA, and so, that can be
problematic for our industry. And using that 75 percent income
derived from agriculture is imperative in these programs where
we can apply for them and be able to utilize those to the
fullest extent.
Mrs. Hayes. Thank you.
Switching gears a little. The funding freezes that have
been proposed in the last month by the current Administration
are sparking widespread confusion. Yesterday, The Washington
Post reported that farmers are missing millions of dollars in
funding they were promised by USDA, despite assurances from the
Trump Administration that funds to individuals would not be
impacted during the Federal freeze.
Mr. Weinzierl, can you describe how USDA factors into the
planning for your farm each year, and if USDA were to freeze
funds that you expected to receive, how would that impact your
current operations?
Mr. Weinzierl. So, we are not using any funds that have
been freezed, but we have a lot of neighbors, and just reading
media reports of other farmers, I can see where that is very
impactful to them. Especially with EQIP, there are many
different types of practices within EQIP. A lot of farmers in
Illinois maybe use it to start cover crops or something like
that where the variable costs are not as high. But in other
practices where you have purchased equipment or perhaps did
major dirt work around waterways where you could easily have
$100,000 or more, it would be very devastating if that is not
followed through.
Mrs. Hayes. Thank you.
Well, I have heard from farmers in my district who have
made necessary improvements so that they could qualify for
these types of programs, and they made those investments on the
front-end with the assurance from USDA that if they brought
their farm up to code on many of these different things,
whether it was fencing or irrigation or solar panels or
whatever, that they would then qualify for these programs. And
now to see those funds dry up or be at risk creates a dramatic
impact on them.
Also, I mean, under that same vein, I have traveled and
visited many USAID sites throughout the world, and one thing
that stood out for me is those tiny peanut butter packets that
address children with malnutrition around the world. Those
packets that had the American flag on them and were saving the
lives of so many children that were produced by farmers right
here in America in Georgia. I am sure they are impacted by
these cuts.
That is all I have, Mr. Chairman. I yield back.
The Chairman. I thank the gentlelady.
I now recognize the gentlelady from Illinois, Mrs. Miller,
for 5 minutes.
Mrs. Miller. Thank you all for being here today. I greatly
appreciate your insights on the farm economy, and I am happy to
see my fellow Illinoisan and corn grower, Mr. Rod Weinzierl,
here today.
Mr. Weinzierl, you mentioned in your testimony that you
believe premium rates in Illinois for corn are too high. What
can we do as Congress to help ensure the Risk Management Agency
is able to balance the calls from producers to make insurance
cheaper while still maintaining enough premium in the risk pool
to help cover losses from catastrophic events like the drought
in 2012 that drove the loss ratio for corn in Illinois to over
$6?
Mr. Weinzierl. Thank you, Congresswoman.
So, we have made adjustments trying to lower our risk, and
you mentioned, what I would say was, an 80 year drought in
2012. What we noticed on our farm, and we had substantial
losses on the corn, is our corn following soybeans, we had no
loss. Our continuous corn, we did. So, over the 3 years after
that, we actually changed our crop rotation, trying to insulate
ourselves and lower our risk. Now, whether that will help to
the degree of another drought of that magnitude, we won't know.
And if it is an 80 year drought, I won't be there.
But, we look at ways to reduce that. We had a lot of rain
back in 2019, and I would have thought a drought would be worse
than rain. Well, in this case it wasn't. Too much water was
worse than not enough. And so, we began moving towards cover
crops because we increased the organic matter in the soil. So,
we are building more resilient soil to have more water holding
capacity, but also, the soil we are noticing, especially at
planting, is more resilient and can take water faster because
we are having bigger rain events.
So, we are doing everything we can to mitigate risk and not
use the program. All we are asking is if we are making these
practices, if we are becoming less risky, somehow reflecting
that in the rates that we pay.
Mrs. Miller. Thank you, and I want to thank the Illinois
Corn for advocating for the development of livestock, ethanol,
and export markets. Very important, and I can say as a farmer
myself, that having a strong safety net is very important.
Strong trade policy, very important, and then also tamping down
inflation and our borrowing costs.
Another big item on Congress's plate this year will be tax
policy and debating the future of various expiring provisions
from the Tax Cut and Jobs Act (Pub. L. 115-97), which could
have huge impacts on farmers and businesses all over our
country.
For anyone who wants to jump in, are there any specific
provisions that you all are tracking or have opinions on when
it comes to tax policy?
Ms. Schwertner. When I think seeing extensions to all these
provisions, any savings that we have on taxes is something that
we can add back into investments in our operation. I would say,
specifically, expanded tax brackets and the estate tax, those
are two areas in which we are significantly impacted on, on our
operation, particularly the estate tax. When passing our
operations from one generation to the next, that is probably
one of the single most reason that operations fail to continue
on from one generation to the next. So, continuing to see those
expanded brackets and the estate tax extended would be great.
Mrs. Miller. I agree. I also agree with you on the
importance of an unlimited stepped-up basis for farm and ranch
businesses, as well as permanently eliminating the estate tax.
And I do want to say that President Trump cares deeply
about our farmers, and I think he has always taken care of us
and he will continue to do so.
Thank you, and I yield back.
The Chairman. The gentlelady yields back.
Sticking with that Illinois theme, I recognize the
gentleman from Illinois, Mr. Sorensen, for 5 minutes.
Mr. Sorensen. Thank you, Mr. Chairman. I am honored to
return to the House Agriculture Committee to represent the
farmers, the rural communities, our smaller hometowns that
often get overlooked.
My focus remains the same. We must move quickly to pass a 5
year bipartisan farm bill that supports fair premiums for our
farmers, prioritizes smart farming practices, protects SNAP,
opens up new global markets, and expands and boosts our crop
insurance. Farming is built on hard work and determination, and
the ability to plan for our future. But right now, that future
is looking more uncertain that it has ever been.
As you have heard today, many farmers are finding it
difficult to yield their way out of the current economic
environment. Instead of driving down the cost of living, this
new Administration is imposing reckless tariffs that will force
the American people to pay the price.
We have seen this playbook before from President Trump. The
trade wars that he started in his first term cost American
families and businesses billions of dollars. Just last week, I
received a call in my office from a farmer named Dave Gillen in
rural Monmouth, Illinois. He told me he is deeply disturbed
about the future of this industry and this country. He is in
his 70s. He knows a lot about farming. He is worried about
these tariffs which will hurt his business. And he said,
``Eric, I am still paying for the tariffs of 2017. You got to
help me out.'' Despite owning his land outright, he is making
less money today than ever due to the high input costs and our
key trading partners like China, Canada, and Mexico being
pushed away from America. He experienced firsthand how Trump's
tariffs have disrupted markets, and he doesn't want to see it
happen again.
We have spent decades building relationships and securing
markets for our crops, only to see them dismantled by reckless
policies, and this isn't just about soybeans and corn or wheat.
It is about the future of rural America. When farmers struggle,
entire communities suffer. Equipment dealers like John Deere
and Deere and Company, which is headquartered in my district,
seed suppliers like Wiffle's Hybrids in Henry County, Illinois,
and small businesses in our smaller hometowns, they all suffer.
Tariffs don't hit corporate executives. They hit Americans'
pockets and negatively impact the men and women who get up
earliest in the morning to feed and fuel our country. So, we
must support our producers and rural communities by passing a
modernized, bipartisan farm bill as soon as humanly possible.
One that will advance our common-sense solutions that will
actually lower the costs for people and preserve our
competitive edge.
So, I want to turn to Mr. Weinzierl first. It is good to
see you, friend. It is good to see a fellow Illinois farmer,
and also, I would be remiss if I didn't tell you, I couldn't
find my Illinois corn pen, but the Illinois Soybean Association
will have to do.
Financial tools like crop insurance, they are integral to
helping farmers keep food on the table and endure economic
uncertainty. And I have heard from many producers in our
district and around the country that this program needs
adjustments. So, could you discuss a little bit about your
experience with crop insurance and what it means for the
financial viability of your farm?
Mr. Weinzierl. Again, thank you, Congressman.
Crop insurance is the risk management tool that we rely on.
Farmers in your district have a very similar loss ratio as our
farm, so a lot of the things that they have been doing lowering
their risk is also reflecting their rates as well. And so,
anything we can do to help make those rates more competitive
and lower their costs for those policies are very important.
Mr. Sorensen. So, quite simply, we are really good at
producing these crops in our part of the world and we pay a lot
in, but we are not getting a lot out. What do you think needs
to be done here in this Committee to change that, and forgive
the pun, level the playing field?
Mr. Weinzierl. So, again, the practices they are adopting
are actually lowering their risk, and corn and soybean yields
are both going up. One of the negative things--and I will try
to be quick. When we went to a crop rotation, our average
production history is based on 10 years of production. So, we
just doubled that. Now, we have to look at building an APH over
a 20 year period instead of 10.
But, that would be one of the things of trying to re-look
at those rules.
Mr. Sorensen. Thank you for your diligence. We appreciate
you.
Mr. Chairman, I yield back.
The Chairman. I thank the gentleman.
I now recognize the gentleman from Kansas, Mr. Mann, for 5
minutes.
Mr. Mann. Thank you, Mr. Chairman, and thank you for
hosting the hearing today.
I represent the 1st District of Kansas. We raise a lot of
wheat, a lot of sorghum, a lot of corn, a lot of soybeans. The
word I would use as I travel the district and talk to producers
when we talk about farm country, the word I would use is two
words, concerning and worsening when you really look at
conditions. And, this is the time of year that our ag producers
are figuring out the books from last year, trying to figure out
their operating loans for this coming year. Those that can get
financing, which are most of them, certainly we are eating into
operating capital, working capital as we all know.
So, we need a farm bill, and I think it is important that
this Committee remembers and we all remember why are we even
having a conversation about a farm bill? Why aren't these
permanent? And the reason they are 5 years, in my view, 5 years
is long enough to provide some certainty, but short enough to
adjust and change with the times. And the biggest change
between now for production agriculture and 2018 is where input
costs are. You can't dramatically increase input costs and
think that the farm safety net also doesn't need to be looked
at and adjusted.
So, my top priority as we think about the farm bill this
year--and it is not going to certainly solve all of our
producers' problems--but we have to get a 5 year farm bill, in
my view, that strengthens crop insurance, which I would argue
is the most cost-effective public-private partnership in
history. We have never managed not to devise a better way to
deliver a robust, steady, safe food supply than crop insurance,
and we need to strengthen it and protect it and make it better.
So, question for you, Mr. Newton. Please, if you would, Dr.
Newton, highlight the challenges that our ag lenders are facing
when working with producers given these current times, and
specifically, what does this do to the lender when you look at
ad hoc disaster assistance versus working with producers on
more certain, long-term programs like crop insurance?
Dr. Newton. Thank you so much for the question.
I can tell you that Farm Credit is there with the producer,
with the farmer in the good times and the bad times. I recently
last week spent time with many of our staff across our
partnering Farm Credit associations to help them understand how
ARC and PLC are going to work for the 2025 crop year. We are
starting to incorporate the expected returns that they may
receive from those farm program payments into their outlooks.
They are incorporating the American Relief Act ad hoc
assistance payments into their outlooks. So, we are constantly
working with our customers again in the good and bad times to
help them understand how all of these risk management tools
work. And we work with them very closely on crop insurance. Our
partnering Farm Credit associations have developed a crop
insurance tool called Optimum that helps the farmer make the
most informed crop insurance decision for their operation. So,
when you combine the crop insurance, the ad hoc support, and
the Title I programs, our partnering Farm Credits are working
with the producers to put together a comprehensive plan for
them as they consider the challenges they are facing this
growing season.
Mr. Mann. Thank you.
Next question is for you, Ms. Schwertner. As the situation
with the farm economy worsens, which we have been talking about
this morning, it will obviously have impacts not just for your
farm, but for the community as well. What does the downturn in
overall ag economy mean for the business and local communities
in the areas that you live there in Miles, Texas?
Ms. Schwertner. Sure. Thank you for your question.
I mentioned previously, agriculture and farmers and
ranchers are really the backbone of our communities. Without
farmers and ranchers, plenty of our local businesses can't stay
in business. We provide hundreds of jobs for local community
members. We also support those local businesses, the cotton
gins, the grain facilities, local beef processing facilities,
the schools. So, so many of those businesses in our local
communities are supported by farmers and ranchers.
So, the farm bill truly is not just for farmers and
ranchers, it is to impact all rural communities across America.
So, it is vitally important that we get a modernized farm bill
that supports farmers and ranchers so that our local rural
communities continue to be supported as well.
Mr. Mann. I agree, and I think we got to keep in context as
we talk about the farm bill. It is our ag producers, but is the
banks in town, it is the hardware store, the grocery store. We
got to keep our rural communities going where the basic values
that make America, America are still alive and well, and it is
incumbent upon this Committee to make sure that we strengthen
the ag sector to make sure that rural America doesn't just
survive, but grows and thrives.
So, thank you for having this hearing, Mr. Chairman, and
with that, I yield back.
The Chairman. The gentleman yields back.
I now recognize the gentleman from Virginia, Mr. Vindman,
for 5 minutes.
Mr. Vindman. Thank you, Mr. Chairman, thank you, Ranking
Member, and thank you to the witnesses for coming here today.
I would like to start by saying, I am excited to join the
House Agriculture Committee, not only because this Committee
has a long history of bipartisanship, but also because
Virginia's 7th District includes significant rural counties and
contributes over 66,000 jobs and $9.7 billion to economic
output in Virginia. As the only Member from Virginia on the
Agriculture Committee, I am excited to represent farmers and
ranchers across the Commonwealth.
Two weeks ago, I met with producers from around the
district in Culpepper for a roundtable. We covered a lot of
ground. Challenging economic pressures and weather events,
extending the Dairy Margin Coverage Program past 2025, crop
insurance programs, and updating our market development
programs to grow existing markets and reach new ones for
farmers to sell their crops beyond traditional trade partners
and conservation programs, animal health in light of avian flu,
and so much more. I am excited to tackle these challenges head-
on with my colleagues on this Committee, and to help producers
back in my district.
But if I had to pick a single unifying factor in my
conversations with farmers to bring here today, it is lack of
certainty. Farmers face enough challenges each day without
their government making them guess what tomorrow will bring.
Will we pass a farm bill that updates practices and payment
rates that are becoming more and more out of date, as input
costs rise? Will government tackle labor shortages or let
another year go by while costs go up? Will there or won't there
be a trade war with our northern and southern neighbors, our
biggest trading partners, that makes it harder for farmers to
find markets to sell their crops?
The way I see it, the Committee has three key
responsibilities: ensure that American families don't go
hungry; American consumers are able to access high-quality food
at reasonable prices; and that family farmers and ranchers
across America have stable economies so they can succeed.
Without question, food security is national security.
Yesterday, my local paper, The Washington Post, published
an article outlining how farmers across the country are facing
significant budget gaps after USDA froze payments on a range of
programs.
Mr. Chairman, I ask for unanimous consent to enter the
following Washington Post article into the record.
Mr. Austin Scott of Georgia [presiding]. Without objection.
[The article referred to is located on p. 146.]
Mr. Vindman. One of the President's first Executive Orders
was to freeze Congressionally appropriated funds from the
Inflation Reduction Act. However, when farmers sign up for
programs, they often are required to front a percentage of the
costs. A few examples. A flower farmer in Maryland signed a
contract for USDA to cover half of a $72,900 solar panel
installation. She is already on the hook for a loan she took
out to cover the other half. A cattle farmer in eastern
Missouri signed a $240,000 contract in December under the
Environmental Quality Incentives Program, pronounced EQIP, and
had already spent $80,000 on fencing and a well that he
expected to be partly paid back by USDA.
Mr. Weinzierl, in your testimony you outlined the input
costs are rising while commodity prices remain break-even at
best. With farmers already operating on tight margins, what do
you think will happen to farmers or when farmers who budgeted
carefully, who made deals with the U.S. Government, and who
spent their own money to keep their end of the bargain, what
will happen to these farmers if the U.S. Government reneges on
that deal by freezing their funds? Do the banks care if USDA
has frozen funding, or are farmers still liable?
Mr. Weinzierl. Well, if farmers have signed a contract or
have already expensed the money, they are on the hook for that
spending. So, hopefully, the uncertainty goes away and we move
forward on reimbursement. It really will depend on how, using
the term wounded, that farm family is relative to what they
have been losing after the last couple years relative to what
the extent of the impact is going to be.
Mr. Vindman. And just briefly, do you anticipate even if
the freeze is lifted in 90 days that there are still bills to
pay during that period of time or projects that are put on
hold. Is that going to have an effect on farmers?
Mr. Weinzierl. I would expect most of them to have good
lenders backing them. Those relationships have probably been
long-term and I would expect most of them to be able to
maintain their current equity position on those projects.
Mr. Vindman. Thank you, Mr. Weinzierl. It is clear that
current policies are only increasing uncertainty and making it
harder for farmers to make ends meet.
With that, I yield back.
Mr. Austin Scott of Georgia. Mr. Wied from Wisconsin.
Mr. Wied. I think we can all agree that many conversations
we have as Americans in recent years is how can we become
healthier as a country? Becoming more healthy citizens needs to
start with having access to the most highly nutritious, high-
quality American grown food. Ensuring the American farm economy
is strong will help ensure that we are raising healthier
families and protecting national security. We cannot make
America great again without making sure those feeding America
are supported in their mission.
As a former business owner, I know firsthand that
uncertainty that costly inputs and uncertainty elsewhere can
cause strain and stress. Not knowing if you will be able to
continue operating a business that has lasted generations, let
alone passing it down to the next generation, is not a position
I envy. I look forward to beginning my work on this Committee
and learning how we can provide our American farmers and
ranchers more certainty in a rough agriculture economy so that
they can plant the seeds for us to make the healthiest
decisions for our Americans and families, and ultimately make
American agriculture great again.
I would like to thank the Chairman for putting on this
hearing today, and all the witnesses for sharing more about
your operations today.
So, quick question, Dr. Newton. Just tell me about exports.
Is that something that--are we in a deficit, surplus? What is
the state of exports as it relates to Canada, Mexico, China,
and otherwise?
Dr. Newton. Absolutely, and fantastic question.
Number one, Mexico is our top agricultural export market.
Canada is number two, China is number three. You round out the
top six with Japan, South Korea, and the European Union. But
agricultural exports have fallen sharply over the last few
years. We are now in a situation where for Fiscal Year 2025, we
are projected to have an agricultural trade deficit of nearly
$46 billion. That is the largest trade deficit in agriculture's
history. But we have record agricultural exports in 2022,
largely on the back of record purchases by the Chinese under
the Phase 1 agreement. USMCA that was renegotiated, and the
renegotiated agreement with Japan all contributed to very, very
strong agriculture exports several years ago.
Mr. Wied. So, what has happened in these last 2 years?
Dr. Newton. Well, the value of our agricultural products as
we are in this current downturn in the farm economy with lower
corn prices, lower cotton prices, that has contributed to a
lower value of our agricultural exports. At the same time,
agricultural imports continue to set new records every single
year. We are importing spirits, imported beers, horticultural
products. Americans want year-round access to fruits and
vegetables. So, our agricultural imports, I believe--I don't
have the exact number--but I think are exceeding $200 billion
this fiscal year.
Mr. Wied. Okay. So, do you think we can do better in
negotiating free and fair trade as it relates to agriculture
around the world?
Dr. Newton. Absolutely, absolutely.
Mr. Wied. I just see that on--this is--I am very excited to
be on this Committee. I do see, though, that the partisan-ness
of coming in and talking about this current Administration for
only several weeks in making all of these things that have
happened, that I think this has been something and the issues
we are dealing with today have happened has been far longer,
right? These aren't things that have happened in 2 weeks.
Mr. Talley, I agree with your thoughts that we should be
investing more in specialty crops, and that we have a unique
opportunity to grow in this sector. You mentioned that you grow
both conventional and organic. With concern for the farm
economy, can you paint the picture as to how your family
decided to move into this organic sphere?
Mr. Talley. Yes. Well, originally, we were completely
conventional, and so, it was a decision that we made to step
into the organic arena when we started our CSA Program, which
is a direct to consumer, like a harvest box program,
subscription-based program where it is a weekly delivery. And
we found that through extensive research that people were
looking forward to your point, more organic oriented and in
that cost sector where they wanted organic produce. And so, we
serve the needs of our clientele. And it has been a wonderful
operation. Now we are in partnership with SNAP where we are
able to really open up that new market for people who couldn't
necessarily afford fruits and vegetables in the organic nature.
So, now they are able to enjoy the fresh fruits and vegetables,
and like the statistic reads, nine out of ten Americans, they
don't eat enough fruits and vegetables. And so, to serve the
less-served population, if you will, with our box program and
organic programs has been a tremendous benefit to us, and
hopefully our clients.
Mr. Wied. Thank you for all you do in feeding America, and
I yield back.
The Chairman [presiding.] I thank the gentleman.
I now recognize the gentlelady from Michigan, Ms. McDonald
Rivet, for 5 minutes.
Ms. McDonald Rivet. Thank you, Mr. Chairman.
This question is directed to Mr. Weinzierl. My apologies on
the name butchering. So, I am from Michigan and live in the
heart of sugarbeet country. My grandfather was a farmer, and so
much of our economy in Michigan depends on our farms.
But in Michigan, with Canada being only a bridge trip away,
many of our farmers rely heavily on the accessibility of trade
for things like potash and other fertilizers. With planting for
many of our farmers right around the corner--we have heard a
lot about that today--they are navigating a field of
uncertainty when making business decisions for the future.
Can you share with me and the Committee how the uncertainty
of what tariffs are going to go into effect will place impacts
on those decisions for you as well, and other farmers, and what
impacts have you seen with trading partners?
Thank you.
Mr. Weinzierl. Yes, thank you, Congresswoman.
So, Canada, again, we import 90 percent of our potassium
fertilizer, or potash, from Canada. I believe the impending
tariff is for 25 percent. A soybean or corn farm is probably
putting on around $100 to $125 worth of potassium per crop, and
so, right there, that would be $25 an acre impact. Mentioned
earlier, over--from 2023 to 2024 and projected 2025, we are
estimating that we will lose about $288 per corn acre across
those 3 years, $140+ on a bean acre. That $25 across all those
acres in one sense doesn't seem a lot, but farmers make their
money on a margin, and we already have a negative margin and
that negative margin will get larger.
So, it is--it could be--it is very worrisome. Hopefully
things get worked out before we are all putting a lot more
fertilizer on our expected crops in the future. But it does add
a lot of uncertainty to our profitability.
Ms. McDonald Rivet. So, we are in the middle of February.
When does planting season start?
Mr. Weinzierl. So, from our standpoint, we will start
planting beans in early to mid-April. We will follow with corn.
We have already put down our potash or potassium last fall.
There are probably some operators that are probably going to
put some on in the spring, but it is probably already booked.
Our concern would be as our ag retailers begin to replace their
stocks of fertilizer here as we go into the summer, that they
will be building in those higher prices for us this coming
fall.
Ms. McDonald Rivet. Thank you.
In Michigan, 60 percent of our jobs pay less than $50,000 a
year, and I say that because of the context of what families
have to spend on food, not to mention the income that our
family farmers are--actually need with their crop production.
So, I am very concerned about the uncertainty and the
instability, as well as the very real potential of putting some
of our family farmers out of business with these rising costs
with the tariffs.
Thank you so much for being here today. I yield back.
The Chairman. The gentlelady yields back.
I now recognize the gentleman from Indiana, Mr. Messmer,
for 5 minutes. Mr. Messmer, I don't think your microphone is
on.
Mr. Messmer. There we go. I got it.
Thank you, Mr. Chairman, and thank you all for your insight
and sharing your time with the Committee. I am also happy to be
here with a fellow alumnus from Purdue.
As I talk to my Hoosiers back home, I hear time and time
again the problems family farmers face who are looking to pass
down the generational farm in an effort to keep the farm in the
family, the fight against barriers to succession that main
street business owners may never encounter.
Ms. Schwertner, you mentioned that your boys are your
driving reason for your efforts to preserve your operation.
Would you explain how the policies that promote farm succession
like those seen in the Farm, Food, and National Security Act
would help ensure the future of your family farm?
Ms. Schwertner. Certainly. Thank you for the question, and
of course, Boiler rep.
If they so choose it, our boys would be fourth generation
farmers for our operation that was started by my husband's
grandfather and his father, and now him. And so, if they choose
it, we certainly want to do everything that we can to provide
them the opportunity to be able to continue the farming
operation as is today. And so, to answer your question, there
is so much that goes into that, right? There is the estate tax
that I mentioned previously. That is a huge, huge deal for
farmers and ranchers because of the capital that goes into
farming operations and the expenses that we have, and
essentially the assets that we acquire over time. And so,
handing that down or passing that down from one generation to
the next becomes problematic with things like the estate tax if
it is not appropriately positioned to address farmers and
ranchers and the assets that we do have.
Additionally, there are so many other things that go into
it as well. I mentioned in my testimony we are currently having
challenging conversations with our banker to acquire credit or
to lock in credit for the upcoming farming and ranching season.
Something that is not easy to do, and it is very humbling to be
having that conversation and to be in this situation, but it is
so important that in those conversations, we have programs that
we can reference, such as a modernized farm bill with ensuring
that crop insurance programs are set in place for us. Certainly
ad hoc payments are helpful, but they don't necessarily provide
the certainty in those conversations with our lenders.
So, again, modernized farm bill that reflects current
market situation is certainly helpful when we have those
conversations with our lender in hopes of maintaining an
operation that we can pass down to the next generation.
Mr. Messmer. Thank you.
I want to shift to input costs that you all spoke so much
about. The USDA estimates that in 2023, fertilizer costs
occupied the fifth largest expense line on the average farm
budget, falling just behind labor costs. In the Midwest, less
than \1/3\ of ammonia demand is supplied by producers within
the region. Instead, farmers depend on, in my district, pay
high costs to import fertilizers from foreign producers, or
transport ammonia from domestic producers outside the Midwest.
While nitrogen-based fertilizer is critical to American
agriculture, holes in our domestic supply chain leave farmers
in my district vulnerable to market volatility, input scarcity,
and price hikes for which the family farm budget really has no
room.
For the farmers here today, would you share how much of
your input costs are devoted to fertilizer expense, and to what
extent your operation would benefit from greater availability
of American-made fertilizer within our region?
Mr. Weinzierl. So, from a corn acre standpoint, probably
about 42 percent of our input costs are fertilizer. Soybeans is
around 15 percent. But the largest share of that 42 percent
would be nitrogen fertilizer.
Mr. Messmer. Okay, thank you.
Mr. Talley. My numbers would be similar. Specifically in
California where we grow specialty crops, I would say our costs
would probably be around that 35 percent and basically
nitrogen-based as well.
Ms. Schwertner. Echoing much of what has already been said
for cotton, I would say that fertilizer input cost is roughly
20 to 30 percent of our overall input costs for fertilizer in
particular. And so, very similar to what has been stated
already.
Mr. Messmer. Thank you.
All right, and for any witnesses here today, if Congress
fails to pass the Committee's farm bill and merely enacts
another extension in September, what would that mean for your
operation?
Ms. Schwertner. Failure to pass a modernized farm bill
provides so much uncertainty for us--and I realize we are
running out of time here, but it is imperative. So much has
changed since 2018. 2018 was a good farm bill, but I--it is so
urgent during this time with commodity prices where they are at
and input prices where they are that we receive some relief
through a farm bill that provides certainty. Thank you.
Mr. Messmer. Thank you, Mr. Chairman. I am excited to get
to work on a farm bill, and I yield back my time.
The Chairman. Very good. The gentleman's time has expired.
Now we are going to go to the State of New York, Mr.
Mannion.
Mr. Mannion. Thank you, Mr. Chairman, and thank you,
Ranking Member, for holding this important meeting. I would be
remiss if I didn't mention that I left the room briefly and
when I returned, I came in with the distinct smell of
fertilizer as I entered. So, I am not blaming anybody, but it
was clear.
As a Representative of a very large agriculture community
and a Member of the Agriculture Committee on the state
legislature, and coming from a family of farmers, I understand
the essential role that agriculture plays in our economy and
our communities. Our farmers work tirelessly to make sure there
is food on our tables, that rural jobs are provided, and that
we drive innovation for sustainable agriculture.
I was also an AP biology and chemistry teacher for almost
30 years. I taught botany, life cycles, ecosystems, anatomy and
physiology, ecology, evolution, nitrogen fixing. So, I will say
this. There is no better scientist than a farmer. Micro, macro
scale. You understand the scientific method. You understand the
impact of variables. You understand that stable systems are
essential for your success and the overall agricultural
success.
What we have seen over the past several weeks is an input
of multiple variables at the same time, which create disruption
to systems. Those variables include unpredictable labor
markets, tariffs, changes in workforce, commitments that are
not going to be potentially followed through on.
So, I am going to start with workforce. Upwards of \1/3\ of
the workforce are individuals that are undocumented, under
documented, or have overstayed their visa. Dr. Newton, in the
past few weeks, do we have any data regarding absences of
members of the agricultural workforce, or anecdotes related to
that?
Dr. Newton. I am not aware of any, no, sir.
Mr. Mannion. Would any other members of the panel share any
details that you might have regarding absences in the workforce
as a result of new Executive Orders?
Mr. Talley. Certainly. So, I had an experience with our
crews. After Trump got elected, I went around and basically
kind of highlighted what his policy was in that he was going to
deport criminals, felons, that sort of thing. I personally
visited along with our harvesting supervisor and went around to
each crew, gave them the message, and the message was actually
well-received. They actually supported the fact that we wanted
to get rid of felons and criminals and the bad actors sort of
thing. And in all honestly, we haven't missed a day in any of
our crews, even, I believe it was a week or 2 ago, there was
kind of a strike, if you will, in our area. A life in the day
without an immigrant worker where all crews were encouraged to
stay home and we had 100 percent attendance that day.
Mr. Mannion. Well, I will say in my district whether it is
dairy farmers or onion farmers, there are great relationships
that exist between the farmers and their employees.
In that vein, you mentioned the H-2A Program, and the
increasing costs related to it. What adjustments--in my
conversations with my local farmers, there seems to be like
some logical adjustments that would enhance that program. Do
you have any ideas, Mr. Talley, for the H-2A Program and how
adjustments could be changed to make it more favorable for both
the farmers and the workers?
Mr. Talley. Yes. I think, as I started to state earlier
today, about a meeting I had with then Labor Secretary Chu, and
the conversation that we had--and basically my opinion was,
listen, we need to tap the brakes on the AEWR, it is becoming
economically unviable. I mentioned the fact that each dollar
rise in the AEWR, for us personally on our farm is $1 million
in labor costs additionally off our bottom line. So, I would
definitely be a proponent of freezing that, because as you
recall, we are also in charge of the housing as well as the
transportation, and dependent on who you talk to, that adds an
additional $5 to $10 an hour on top of the AEWR.
Mr. Mannion. Thank you all so much. I appreciate it.
The Chairman. I thank the gentleman.
I now will go to the gentleman from North Carolina, Mr.
Harris, for 5 minutes.
Mr. Harris. Thank you, Mr. Chairman, and thank each of you
on the panel that have come to share with us today.
I must say, as a freshman Member, it has been eye-opening
to witness how this branch of government often neglects to do
its job year after year. We failed to conduct proper oversight
and authorize programs which leads to where we are today, and
producers are only seeing a rise in income because of Federal
disaster spending and the accumulation of ad hoc spending far
exceeded any estimates of the farm bill programs. And even now,
we are 2 years behind on the farm bill.
I just want to ask one of our producer witnesses, Ms.
Schwertner, I will go to you. Would timely reauthorization of
the farm bill actually improve your ability to do your job, and
if so, how so?
Ms. Schwertner. Thank you for your question.
Certainly, timely reauthorization would help. Times change
so quickly in the world that we live in. It has been roughly,
what, 6, 7 years since we have seen an update to the farm bill.
The 2018 Farm Bill was good; however, reference prices are
outdated. Programs that were included in that farm bill are
outdated, and so, some of the things that have been included in
the Farm, Food, and National Security Act are certainly going
to be helpful. So, some of the proposals we certainly
appreciate the increase in reference prices, the increase in
expanded Market Access Program and FMD are certainly helpful.
But reevaluating those more frequently gives us an opportunity
to better reflect current market conditions, which is always
helpful for us.
Mr. Harris. Great.
Mr. Talley or Mr. Weinzierl, would you offer any thoughts
to add to that?
Mr. Talley. Absolutely. For us, it is the automization and
the mechanization. Labor has been often discussed here. It is a
real issue for us when close to 50 percent of our costs have to
do specifically with labor, and just that consistent flow, that
consistent investment into specialty crops is imperative to us.
I always say consistency always beats intermittent
intensity. It is that consistent drip of I was going to say
spending, but actually spending, no. It would be--because when
I spend something, I don't expect a return. But when I invest
something, I expect a return. And so, it would to your point an
investment because it is needed in agriculture.
Mr. Harris. Exactly.
Mr. Weinzierl?
Mr. Weinzierl. The only thing is I would put emphasis, as
was already mentioned, on expanded funding for Foreign Market
Development and Market Access Programs. We all see exports are
really in the news right now, and having those resources to
maintain those customer relationships and to build new
customers are ultimately important to market demand.
Mr. Harris. I got you. Well, thank you.
Dr. Newton, another top priority for me is making sure that
we respect taxpayer dollars and spend responsibly. So, let me
ask you, do you think that timely reauthorization of the farm
bill would help control Federal spending on agriculture, and
lessen the need for extra ad hoc, disaster, or emergency
spending?
Dr. Newton. Thank you for the question.
I think that timely reauthorization is one element of it.
The second element of it is, is it enhanced? The farm bill is a
5 year contract with agriculture and rural America. As we have
heard, the programs and support levels are extremely outdated.
The support that we have for MAP and FMD funding has been
stagnant for years. So, just a regular old farm bill is not
going to cut it. It has to be an enhanced farm bill. That is
what agriculture needs.
Mr. Harris. And if the farm bill is supposed to provide a
safety net, can we really say that our safety net is working if
we are spending twice as much on supplemental aid?
Dr. Newton. Absolutely not. In my previous role in the
Senate, we had a producer tell us that our safety net is about
2" above concrete. That is where we are today, so we need to
make those enhancements to the farm bill.
Mr. Harris. Very good. One final question.
Mr. Talley, I want to come to you. Thanks for being here
today and sharing the challenges that your farm is currently
facing. Can you just, please, in the last few seconds we have
paint us a picture of how much capital you put at risk year
after year, and how the impact of even a small change in your
profit margins can affect your ability to secure an operating
loan?
Mr. Talley. That is a great question.
It is--as you all know, agriculture is a very capital-
intensive industry, and the land costs, all of our input costs,
the way they have escalated over the past 4, 5 years has been
nothing like I have ever seen before. And it really hamstrings
our ability of financing to get loans when everything is just
costing 30 to 60 percent more. The available funds are no
longer available.
Mr. Harris. Got you. Thank you, sir.
Thank you, Mr. Chairman. I yield back.
The Chairman. I thank the gentleman.
I am now pleased to recognize Ms. Adams from North Carolina
for 5 minutes.
Ms. Adams. Thank you, Mr. Chairman and Ranking Member, for
organizing this hearing, and thank you to each of our witnesses
for your testimonies.
First of all, I do want to shout out to Dr. Newton, as I
also earned my Ph.D. from the Ohio State University, which is
especially relevant now that I am on the Research Subcommittee.
It would be nice to see some more 1890s graduates up here, but
I don't think I am allowed to say that anymore.
But let me just say that the economic crisis in farm
country spans the food, fuel, and fiber supply chains, even in
my most urban district. Like many here today, I have received
hundreds of calls over the past 2 weeks in response to the
Trump Administration's memo from OMB announcing a pause in all
Federal funding. Press coverage has focused on the lawsuits
filed to stop this nonsense and how this memo was rescinded.
But funding pauses at the time of this hearing remain in
effect, including at USDA. And so, I fear that these pauses are
really just cuts by another name. For example, a food hub in my
district has not been able to get its awarded funding under
programs like the Local Food Promotion Program which operates
on a reimbursement basis.
So, even with signed contracts, organizations are in the
red for spending money USDA was on the hook for to cover, and
it is affecting the crucial services that they provide to
hundreds of small-scale diversified farmers in the Carolinas.
And it has been nearly impossible to get answers from USDA,
adding more uncertainty to the crisis.
If it is all right with the Chairman, I want to enter this
letter from Fresh List Food Hub in Charlotte in my district
into the record.
[The letter referred to is located on p. 138.]
Ms. Adams. But let me ask my first question to Mr. Talley.
Thank you for your testimony and expressing support for Title X
horticulture programs, and as I just shared, President Trump's
funding freeze has impacted participants in programs like LFPP,
who are expanding regional food economies, building new
markets, and improving food safety. And so, I understand that
your farm does not export produce internationally. As a
representative of the Specialty Crop Farm Bill Alliance, can
you tell me a little bit more about the importance of domestic
market access for your operation?
Mr. Talley. That is of utmost importance. Obviously we do.
In specialty crops, we--basically the majority of our product
stays within the United States, and it is imperative that we
continue to harbor that and really have clear access channels
for all of our farmers in the U.S. to have access to these
markets, and to be able to continue to flourish within the
United States.
Ms. Adams. Well, thank you.
My next question. Mr. Weinzierl, thank you for your
testimony.
Cuts to staffing concern me in addition to cuts to funding
and President Trump, in collaboration with Elon Musk, has been
intent on reducing the Federal service with so-called buyouts
and mass layoffs.
As someone active on access to ag credit and conservation
programs, I want to know, could you speak to staffing levels at
the USDA offices like FSA or NRCS that you interact with, and
are they adequate?
Mr. Weinzierl. So, yes, thank you, Congresswoman. We do
interact quite a bit with FSA personnel at the county level. I
would say that we have not noticed any difference yet in
service, but we are aware of the communications that you are
referring to.
I would also say that our FSA office, and I think a lot of
FSA offices, have become very efficient over the last 4 or 5
years in communicating and being able to work out contracts
with farmers and it will be important to maintain them at
adequate staffing levels.
Ms. Adams. So, do you think a hiring freeze or mass buyout
would exacerbate what you have observed?
Mr. Weinzierl. I have not noticed anything yet,
Congresswoman, but I think there is still evaluation going on
within the state FSA office and--relative to what the
implications are.
Ms. Adams. Thank you very much.
Mr. Chairman, I yield back.
The Chairman. I thank the gentlelady.
I now recognize the gentleman from Ohio, Mr. Taylor, for 5
minutes.
Mr. Taylor. Thank you, Chairman Thompson, Ranking Member
Craig, for holding this hearing today, and my thanks go to our
witnesses for their time and insight as well.
I am looking forward to working with you and President
Trump and the rest of my colleagues to pass a full 5 year farm
bill this Congress, a farm bill that promotes crop insurance,
expands trade into new markets, and invests in the next
generation of farmers. Coming from Ohio, a state with nearly
76,000 farms, 11,000 of which are in my district, I am proud to
be on the Agriculture Committee.
As has been discussed several times today, input prices are
still sky high. Prices have come down, but not to pre-Russia-
Ukraine war levels, and in today's modern farm economy, you
need the best seeds, fertilizer, and equipment to compete. It
is amazing the innovation that has happened in the agricultural
world. It didn't rain for several months in southern Ohio last
summer, and yields were still much higher than what was ever
possible 30 to 40 years ago.
But one of the ways to improve farm efficiency and yields
is to adopt precision technology. Precision ag technology
ranges from GPS and yield mapping to several other items that
can help reduce input costs, detect pests or diseases early,
and increase farm profits. I think one of the main things that
is overlooked is the necessity to have rural connectivity for a
lot of precision agriculture technologies. My district is
extremely rural, and at least 24 percent of the farms lack
internet access to adequately track and utilize these
innovations.
Can any member of the panel speak a little about the
benefits of precision technology for our farmers, and the
importance of rural connectivity in this equation?
Ms. Schwertner. Yes, thank you for your question.
I can speak to this in a multitude of ways. So, first and
foremost, we live in a very rural community as well, 1,000
people in Miles, Texas, and about 20, 30 miles from the next
Walmart. I work remotely full-time, and so in order for me to
do my job, I rely so heavily on rural connectivity and ensuring
that I have adequate access to internet to do my job and to be
able to also provide that off-farm income to continue to
support our operation and our family.
In addition to that, so many of the technologies that you
describe when it come to equipment relies on rural
connectivity, and without it we lose out on those efficiencies
that help us with lack of labor in some instances. For example,
we invested in a cotton stripper, a round baler just a few
years ago, and with the technology that that provides us, it
has enabled us to essentially eliminate a few jobs that we
previously relied so heavily on temporary workers for. And so,
just that alone, the ability to take advantage and leverage the
technologies and the equipment that rely on that rural
connectivity, it is so important that farmers and ranchers, but
also just rural communities in general and workers in rural
communities have access to appropriate connectivity.
Mr. Taylor. Thank you.
Mr. Talley. So, for us on our farm, we use GPS with our
laser technology leveling fields, as well as GPS when we are
disking and ripping and plowing, as well as GPS when we are
cutting lines. And we have seen with lasering, ripping, and
disking, we have seen a 20 percent savings. That is not only
time; that is in fuel, that is in tires. That is in the whole
broad spectrum of savings.
And so, that has been a tremendous advancement for us, and
it just continues to get better. We are now using it--we are
starting to use it on our smaller tractors when we are
cultivating and so forth where we anticipate seeing probably
another ten or 15 percent improvement in our efficiency.
Mr. Taylor. Thank you.
Dr. Newton, I want to ask this question, and then if you
would just get back to me with the answer, because I know I am
going to run out of time before we get to it all. But as of
2022, Ohio is the country's 10th largest agricultural exporting
state, shipping out over $6 billion in ag exports. Corn and
soybeans represent over half of all agricultural exports from
the state. Representing seven counties that border the Ohio
River, I know how vital it is that we utilize the river and
continue to grow our export markets.
Our agricultural trade deficit is projected to be over $45
billion, and our commodities have started to be pushed out by
others from around the world. The farm bill trade programs, our
Market Access Program, and the Foreign Market Development
Program have shown great benefits to our farmers, but they have
not yet seen any increase in investments since 2022. Since that
last increase, Brazil's soybean exports have increased by 431
percent, and they have replaced the United States as the
world's largest soybean exporter. This increased competition in
international markets has eroded the edge the U.S. once had in
the soybean export market. It is clear that we need to expand
into new markets, which is why a full farm bill is so crucial
to the farmers in my district.
Dr. Newton, what do you see as the main barriers to
expanding our agricultural trade abroad, and how can we reduce
our agricultural trade deficit? Again, you can get back to me
with your response.
Thank you, and I yield.
The Chairman. I thank the gentleman.
Now, I recognize the gentlelady from the Island State of
Hawaii, Ms. Tokuda, for 5 minutes.
Ms. Tokuda. Thank you, Mr. Chairman, and lesson to me that
dairy farmers will be prompt. I was 1 minute late today. I
promise we will be on time next time.
I want to thank all of the panelists for their patience and
for being here. Many of the issues that I want to talk about
were already brought up, so I am just going to expound a little
bit on some of the questions that have previously been asked.
I want to go back to the issue of staffing levels at USDA.
Within every one of our communities and Congressional
districts, our FSA, NRCS, R&D staff, they are critical
lifelines. I think Mr. Weinzierl, you talked about the need,
actually, for more focus from NRCS on technical assistance in
our communities, and what a difference that can make.
Again, I want to go back to the fact that there is this
deferred resignation offer. It has not been acted upon. They
are still working their jobs, 9:00 to 5:00, many times over in
that particular case. But right now, we are seeing literally
65,000+ that have taken that offer. There was a goal, we know,
of five to ten percent of culling of the Federal workforce.
This is upwards of 200,000 individuals throughout the country.
Would you say right now that USDA staffing in our
communities to support everyday farmers, especially our small-
to medium-size farmers, ranchers, and producers, are adequate
right now as it exists today to meet the needs and to be able
to really have farming now go from the red to the black?
Mr. Weinzierl. So, I guess from our standpoint, as a farmer
who has not used NRCS programs, the staffing level in the past
has been such that generally NRCS will focus on those farmers
who have signed contracts. There is a lot of opportunity for
NRCS to provide more technical service support to the farmers
who have not signed contracts, and I don't----
Ms. Tokuda. So, let me ask this question because I want to
be mindful of my time.
Do you think that they could do that extra technical
assistance with their existing staff, and what would happen if
their staff theoretically were cut in half or more? Could they
provide now additional technical assistance to folks you are
mentioning, like yourself?
Mr. Weinzierl. I would say they are not providing as much
technical service support already, and if their staffing was
reduced, obviously it would be less.
Ms. Tokuda. Okay. If I could just get a real brief yes or
no. If the staffing at USDA, especially in those particular
areas of FSA, NRCS were cut at least by half, would we see
significant decrease in services and support to farmers?
Mr. Weinzierl. Yes.
Ms. Schwertner. Yes.
Mr. Talley. I really don't have enough information to give
you an accurate answer.
Ms. Tokuda. Dr. Newton, any comment?
Dr. Newton. I think the same. I think it depends on what
happens with replacing those workers.
Ms. Tokuda. Okay. Well, just to let you know, Mr. Chairman
and Ranking Member, we have sent a letter to OPM asking for a
breakdown by agency, department, Congressional district on
where these potential individuals will be leaving and taking
that deferred resignation offer so we can understand the
potential impacts.\4\
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\4\ Editor's note: the letter referred to is located on p. 143.
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Dr. Newton, you painted a pretty grim but honest picture of
the state of the agricultural economy. I mean, 3 years in a row
of lower negative economic returns for crop farmers. Our farm
sector economy has declined 22 percent over the last 3 years.
Would you say right now for the everyday farmer that is
reflected on these particular graphs, how much cash reserve do
you think they have?
Dr. Newton. That is probably a tougher question to answer.
I don't think that information is available in aggregate, but I
would defer to my colleagues here.
Ms. Tokuda. But generally, our small- to medium-size
farmers, do they have cash reserve?
Dr. Newton. There are farms that have working capital that
have been built up over the years. I think if you look at dairy
farms and cattle farms that we work with----
Ms. Tokuda. Well, we know the cattle and dairy to point on
your graph, they are doing fine right now, our ranchers. It is
our crop farmers that are suffering.
I guess my question is for many of these individuals as it
was asked, they have invested tens of thousands, if not
hundreds of thousands of dollars into cost-share reimbursement
programs like EQIP, Conservation Stewardship Program, all these
different acronyms. What happens if they are on the hook, and
can they survive beyond 90 days, because we know that that is
just the hope that they will actually be reimbursed in 90 days?
If they are reneged on these particular contracts, will they be
able to survive with their current cash?
Dr. Newton. Well, Farm Credit we work with our customers
through the tough times and the good times. I think we have
heard that testimony here today. But very importantly, all of
these environmental sustainability initiatives, the farmer has
to be economically sustainable first. And I think that is what
we are talking about here is the economic crisis that farmers
are dealing with across the country.
Ms. Tokuda. So, similar farmers have faced COVID crises.
They have faced other trade war crises that we saw in 2017,
2018. I guess my big question is can they actually take this
additional hit to farming right now, especially when we
consider that it is coupled with both potential trade wars,
loss of labor due to immigration policies, and so many other
different things.
Mr. Chairman, I do have additional questions that I want
inserted into the record. Thank you.
The Chairman. I appreciate that. I thank the gentlelady.
I now recognize and welcome back to the Committee the
gentleman from Washington State, Mr. Newhouse, for 5 minutes.
Mr. Newhouse. Thank you, Mr. Chairman, Ranking Member
Craig, and thank you for allowing me to be back on your great
Committee. I also want to thank the witnesses for traveling to
Washington, D.C., and providing us with your testimony today. I
really do look forward to working together with everybody in
this room to figure out some of the solutions to the challenges
that we have in agriculture today. We truly have a crisis.
I am a third-generation farmer. My son is the fourth
generation. We are specialty crop growers in the State of
Washington. Hops, wine grapes, cherries, pears. From firsthand
experience, we and I know that the high input costs and low
prices are a recipe for disaster. It would be probably the
biggest understatement we would hear today to say that times
are tough. So, we need some solutions to these challenges.
Just to help illustrate that, a recent survey conducted of
apple growers in the State of Washington, which maybe you have
heard of apples from Washington, but labor costs increased 127
percent over the last 10 years while grower returns have only
increased by 22 percent in that same time period. Similarly,
the survey showed that labor costs ate up 70 percent of grower
returns before input costs were paid for the 2022 crop. And
then get this, in 2023, that number rose to 99 percent of the
2022 crop. So, I totally want to look forward to working with
you, particularly you, Mr. Talley, and the Specialty Crop Farm
Bill Alliance as we tackle some of these things. The Farm
Workforce Modernization Act (H.R. 4319, 118th Congress) is a
high priority of mine, and we do need to get a handle on making
sure that the H-2A Program is not the reason for farms' demise,
but certainly the reason that they can exist and find adequate
and legal labor.
I just wanted to--you mentioned this a little bit, Mr.
Talley, but I would like you to talk a little bit more about
some of the things that we could invest in, mechanization of
specialty crops you mentioned as being a viable offset to high
labor costs. What are some of the other things that maybe we
could look at as far as research is concerned that might help
in this space?
Mr. Talley. I would say other than mechanization, it would
be crop protection products. We have lost a lot of our crop
protection products over the years. A lot of times, what ends
up happening with us is that we have large companies that
produce a product that will serve corn and soybeans, and then
if it just happens to fall into the specialty category, if they
can kind of just get it in, they will go ahead and register it.
And California now, it is more and more difficult to register
pesticide products, and the barrier of entry is pretty high.
And so, we are suffering in California just due to a lack of
efficient products in our arsenal. And I would say that is
probably, next to mechanization, that is going to be the next
concern that we have for specialty crops.
Mr. Newhouse. Great, thank you very much.
I want to move to you, Dr. Newton. Thank you for being
here. It is a little difficult to understand Arkansas-ism, but
we are getting through that.
We produce a lot of crops in Washington State that are
exported, and so, foreign markets, as in California, are very
important as well, all over the country. You mentioned in your
testimony the importance of trade programs, like the Market
Access Program, the Foreign Market Development Program. Could
you speak a little more about some of the impacts of those
programs have had, and by doubling the amount that we invest in
those, what they may offer to the agriculture industry?
Dr. Newton. Absolutely, and the accent you hear is actually
Kentucky, not Arkansas.
Sixty-seven percent of our agricultural exports go to our
top six markets, so when you think about the MAP and FMD
funding, doubling that, that allows farmers and their
cooperators to go out around the world and find new markets for
agricultural products, develop relationships with those
customers so that we can continue to grow our export
opportunities.
Mr. Newhouse. Good, and just so fellow Members on the
Committee know, I have introduced legislation to do exactly
that (H.R. 1086, Agriculture Export Promotion Act of 2025),
double the investments in those two programs.
Again, thank you all to the witnesses today for your
testimony, and Mr. Chairman, with that, I will yield back.
The Chairman. I thank the gentleman.
I now recognize the gentleman from Alabama, Mr. Figures,
for 5 minutes.
Mr. Figures. Thank you, Mr. Chairman, and thank you to all
of the witnesses for grinding this out with us more junior
Members down on the dais here.
I want to start by thanking my team, Kyla Cole, who is with
us who has been so diligent in helping us prepare for this
hearing. So, thank you, Kyla, and the Committee staff as a
whole. You guys do way more than the Members do for these
hearings. So, thank you.
As the son of a man who, among other things, owned a small
cattle farm down in Alabama, I know a little bit about farming,
but not nearly as much as this distinguished panel.
Mr. Weinzierl, I want to start with you. I know at the end
of the day, the goal for everybody that runs a farm is to get
your product to market, to get it to the stores where consumers
can purchase it in our cycle of the economy here. So, is it a
fair statement to say that the more money Americans are
spending in grocery stores, there is generally a trickle-down
effect that is beneficial for the farming community, or farming
industry?
Mr. Weinzierl. Yes.
Mr. Figures. And if we are proposing policies as a Congress
that will limit the ability of some of our poorest people to be
able to spend money in grocery stores, particularly in the form
of billions of dollars, is it a fair assumption to say that
that could ultimately have a similar trickle-down effect that
would negatively impact the farming industry?
Mr. Weinzierl. Well, our strongest markets are the
livestock industry and meat is typically a fairly high-priced
product, and that might--that is probably most likely the place
that people would cut back on.
Mr. Figures. All right, but more than just meat is--the
farming industry consists of more than just meat, and
theoretically, those funds in the form of SNAP benefits would
be spent on more than just meat.
Mr. Talley, my next question is for you. The Alabama
Department of Agriculture and Industries was recently awarded
about a $\1/2\ million grant, Specialty Crop Block Grant, and
we are getting some reports that that funding is tied up in the
current freeze. Can you talk a little bit about the impact on
producers of specialty crops or the impact on specialty crop
farmers of freezing funds like that, and how that may further
impact the disparities between Title I crops and specialty
crops?
Mr. Talley. I think that is kind of best to be answered on
a case-by-case basis. I know in general the specialty crop
industry doesn't count on ad hoc payments as part of their
business plan, so that would be more on the case-by-case.
Mr. Figures. Understood, thank you.
And Ms. Schwertner, this next question is for you. I want
you to take the balance of the time, if you wish. No disrespect
to you, Dr. Newton. But you mentioned something in your opening
statement that really resonated, because I personally find the
fear of younger generations not wanting to take on the farm one
of the biggest threats that we have to our national security.
Honestly, a nation that cannot feed itself is a nation that is
a much less secure nation. So, can you talk a little bit about
the current environment, that threat in general. What do you
think we can do beyond just the farm bill to make sure that we
are incentivizing the farm industry and treating the farm
industry with the urgency that it needs so as to encourage
future generations to do what you guys have done and are doing?
Ms. Schwertner. Certainly. Thank you for your question.
As a mom of four boys who I hope will take over the
operation, or at least one of them will take over the operation
someday, it is critically important to me that my husband and I
understand and do everything that we can to ensure that the
farm can sustain and continue on for generations to come.
You mentioned that national security is at risk here, and
you are certainly correct. If we don't have the next generation
of farmers and ranchers or agriculturalists to continue to take
over we lose our ability to feed our own nation, and that
certainly is going to be critically impactful to everybody in
rural communities. I have mentioned time and time again also
that it is not just important to us as a business owner or to
the future generations who might take over, but it is important
to the rural communities.
And, I say all of that and you ask what can we do to
incentivize or to encourage young producers? As a mom of boys,
it is hard to think about how you never want your kids to
endure the things that you have endured and the challenging
conversations that my husband and I are having currently, and
the conversations with our banker. Those are conversations that
I hope my children don't have to have if they do choose to take
over the operation. And so, I am hopeful that as a Committee,
we can continue to evaluate the farm bill and the progress
towards farm bills now and in the future that will enable
future generations to continue.
Mr. Figures. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you.
I now recognize the gentleman from Tennessee, Mr. Rose, for
5 minutes.
Mr. Rose. Thank you, Mr. Chairman, and congratulations to
our Ranking Member Craig on your new leadership role on the
Committee. I look forward to working with both of you in the
119th Congress.
As we look to correct course this Congress following the
lackluster initiatives and failed policies of the previous
Administration, we must ensure we prioritize farm country and
deliver our producers out of a financial crisis.
Since 2022, as we have heard mentioned today, net farm
income has fallen by $43 billion due to high input costs,
supply chain disruptions, and low commodity prices.
Skyrocketing costs of production and low prices ate away at
farmers' margins and forced American agriculture into the red.
I applaud Chairman Thompson's work to secure financial and
disaster assistance in the American Relief Act, but we all know
that assistance was only a band-aid to a much larger issue
plaguing the industry.
As an eighth-generation farmer, our farmers, foresters, and
landowners are in a desperate need of a comprehensive farm bill
that provides an adequate safety net and ensures operations'
longevity. Congress has punted passing a farm bill for far too
long. It is time to stop delaying with farmers--stop playing,
pardon me--with farmers' futures and enact a bill that will
strengthen producers' ability to farm and rescue
agriculturalists who have been left out in the cold. It is time
that we make agriculture truly great again.
Dr. Newton, as you mentioned--and by the way, my sister
says hello. As you mentioned in your written testimony, beef
prices have been touted as being at some of the highest levels
in recent years, but with input prices being just as high,
American cattle producers are not seeing much in the way of
real benefits. With the market in its current condition,
production costs where they are, and continual decline in
cattle inventories, what can cattlemen--cattle producers expect
in their operations over this next year?
Dr. Newton. Well, tell your sister congratulations on her
retirement as well. I always enjoyed working with Ms. Radano.
The cattle industry, the tough part is where do producers
go next, right? They are facing tough conditions on pasture.
The replacement animal costs are extremely high. They face
incredible challenges beyond just what we are dealing with on
the input cost side. So, we work with a lot of our cattle
producers, but a lot of them are hesitant to begin to think
about that process of maybe expanding. They are catching up
from the tough years that they are coming out of right now.
Mr. Rose. Mr. Talley, as the Trump-Vance Administration
works to combat unfair and undermining trade practices across
our foreign markets, what would American fruit and vegetable
producers like to see as we work to level the playing field and
ensure fair competition, particularly as it relates to Mexico?
Mr. Talley. Thank you for the question. I would have to
defer and get back to you on that for specifics.\5\
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\5\ Editor's note: the information was posed as a question for the
record and is located on p. 149.
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Mr. Rose. Okay, thank you. I hope you will do that.
Dr. Newton, as your testimony reveals and the chart that
you provided makes clear, for the first time really in my
lifetime and the last 5 years, we have seen ag trade deficits
for this country. It is very concerning to me. Where would you
say are the real opportunities to impact that growing deficit?
How do we turn this around as a nation?
Dr. Newton. Well, I think first and foremost is we have
talked about reinvesting in our important trade promotion
programs, the MAP and FMD programs, so we can go out and find
and develop those new markets. Increasing domestic demand will
also help, because that lifts our commodity prices and lifts
the value of our exports as well.
So, I think that we have incredible opportunities ahead of
us, but we need to make those investments in trade to do so.
Mr. Rose. Do you think that value-added products is part of
that answer for how the U.S. recovers from the current trade
deficit in agriculture?
Dr. Newton. Absolutely.
Mr. Rose. Thank you.
Ms. Schwertner, in the little time that I have left--and by
the way, I am a fellow Purdue Ag Yukon alum, so congratulations
on that. If Congress does not address the challenges facing the
agricultural community with a comprehensive farm bill, how long
do you believe you and operations like yourself will--are from
being forced to significantly downsize or outright exit
agriculture?
Ms. Schwertner. Certainly. Thank you for the question, and
I have very little time, but, I can mention we are already
having the conversations with our banker now. It is hard to say
how long we can continue to sustain. Payments are helpful, but
I just would mention that there is an urgency behind needing to
resolve the problems that we have.
Mr. Rose. Thank you, Mr. Chairman. I yield back.
The Chairman. I thank the gentleman. I would also say, you
are going to have to live north of the Mason-Dixon line in
order to do speed reading.
I now recognize the gentleman from New Mexico, Mr. Vasquez,
for 5 minutes.
Mr. Vasquez. Thank you, Mr. Chairman. Thank you to our
witnesses for sticking it out with us today and sharing your
insights on the challenges that face our modern farm economy.
I represent New Mexico's 2nd District. Livestock and tree
nuts are among our largest export, but our greatest gift to the
country is green and red chili. I represent Hatch, the chili
capital of the world. We are very proud of that.
But what farmers and ranchers are facing in my district is
the uncertainty of the lack of a farm bill. In 2 years, we
haven't been able to get it done. The potential funding freezes
that have already impacted their day-to-day businesses, and
producers that are at risk of losing their stability if we
continue to play politics here and play with their livelihoods.
Now, on top of that, we are facing another destructive
trade war that would devastate our agricultural sector. We have
seen this before. In fact, the Commodity Credit Corporation had
to bail out the previous Administration to the tune of $28
billion because of the trade war. It was unnecessary. If these
tariffs move forward, they could deal another devastating blow
to New Mexico's farmers and the communities that rely on them.
Now, let me tell you about the irony of these tariffs. Now,
this Administration is using American farmers as leverage to
solve an issue that they have no control over. Farmers have no
control over immigration policy in this country, but yet, their
livelihoods are being used essentially as pawns in this larger
game. And simultaneously as you begin to freeze their payments
and don't pass a farm bill, we give them even more uncertainty.
And so, my first question is to Mr. Talley. Now, Mr.
Talley, the American ag sector has seen the impacts of these
tariffs before. We lost over 150,000 farms. Do you think small-
and medium-sized farmers can survive another trade war in this
country?
Mr. Talley. That is, like I had expressed before, it is
difficult to answer that sort of question because it is a case-
by-case situation. Tariffs, retaliatory tariffs, it is hard to
be concise and to give you a direct answer to your question.
Mr. Vasquez. So, will we most likely see losses than gains
in your opinion?
Mr. Talley. Once again, it depends. It is case-by-case. I
am not comfortable answering that question, because it really
depends. It depends on the time of year. It depends on what
commodity.
Mr. Vasquez. Based on history, did we see more losses the
last time the trade war was in effect?
Mr. Talley. I am sorry?
Mr. Vasquez. Did we see more losses in small- to medium-
sized farms the last time the trade war was in effect in gains?
It is a numbers question.
Mr. Talley. Yes.
Mr. Vasquez. It is not speculative. Okay, thank you.
To Ms. Schwertner, you talked about unpredictable
international events having a great impact on the future of
farms in this country. Now, if these events are not
unpredictable and these events are actually domestically led by
our very own Administration, shouldn't we be here today
advocating for less surprises and more reliability?
Ms. Schwertner. Certainly. Certainty and learning--knowing
what to expect certainly attributes to the success of our
operations.
Mr. Vasquez. Thank you.
Well, I appreciate that because the international events
that we create are predictable and we should be advocating for
those farmers to make sure that we are protecting them first.
Now, Dr. Newton, you also mentioned that historical times--
farmers face historical times for the future of farming in this
economy that we have never seen before. The conditions are
unlike any time that we have seen before. So, do you think it
is a good idea to compound these historical challenges with a
new trade war?
Dr. Newton. I thought we were doing easy questions only.
I think more than anything, it is so important for
Secretary nominee Rollins to get into the office so that she
has a voice in the Oval Office and can communicate to the
President how these issues impact agriculture.
Mr. Vasquez. Well, thank you, Dr. Newton.
Look, my point here in this line of questioning is that I
believe farming and ranching and the rich legacy of agriculture
and how much our rural economies depend on us being here and
discussing the issues that matter are something we can all get
together on. This should be a bipartisan idea that these
harmful tariffs are going to, bottom line, hurt American
farmers and ranchers.
Now, New Mexico's ag sector, that is going to be one the
hardest sectors that are hit, including our cattle growers who
right now are depending on those imports of alfalfa and feed to
pretty much power their entire industry directly from Mexico.
We are talking pecans, beef, veal, and we got plenty of other
issues that we got to deal with like the shortage of water,
extended drought, and so much more. So, my point is that these
tariffs are really going to hurt the American farmer, and it is
going to be those small- and medium-sized farms that depend on
them.
So, I look forward to working with my colleagues,
especially on the reform of H-2A, to make sure that if we are
going to talk and have a conversation about immigration and use
farmers as leverage or ranchers as leverage, that we are
talking about how to get more workers out to the field, lower
costs for Americans, and do good for everybody in this
industry.
Thank you, Mr. Chairman. I yield back.
The Chairman. I thank the gentleman.
I now recognize Mr. Baird from Indiana for 5 minutes.
Mr. Baird. Thank you, Mr. Chairman and Ranking Member. I
appreciate all the witnesses being here.
So, Ms. Schwertner, I am going to start with you from the
standpoint I want to compliment you because you went to Purdue
University to get a bachelor's degree in ag econ and agronomy.
So, a good place to start.
But the other thing that I see that you have done is been
involved with not only the Farm Bureau, but with 4-H and FFA,
and I think that maybe doesn't deal directly with what we are
talking about today, but I do think it is a supply chain that
we can use to get young people back into the farming and
agricultural industry.
But I also noticed one more thing, that you are a certified
crop advisor. Is that true?
Ms. Schwertner. Yes, sir, it is.
Mr. Baird. So, anyway, that leads to my question.
We have talked about expenses and costs and so on and so
forth, but here is an area that I am going to ask about, and
that is the USDA county offices. They can play a pivotal role
in delivering the essential services to our communities and ag
communities in relation to farm loans, disaster assistance, and
the conservation programs. And so, my question to you is can
you discuss how the staffing levels at your local USDA county
office have impacted your farming operation, and specifically,
how does the presence and absence of sufficient staff affect
your access to these critical programs?
Ms. Schwertner. Certainly, yes. Thank you for the question.
And, we are very fortunate to have a great local office to
support us on our operation, and to be completely honest, we
rely on them so much to be the experts in the programs that are
being offered, and what we need to consider doing with our
operation to ensure that we are optimizing the programs that we
have access. And so, any sort of decrease or reduction in
staffing or opportunities--to speak with people in those
offices--could potentially lead to inadequacies in our
operation and inefficiencies in our operation as we try to
conduct business and proceed forward to be successful.
Mr. Baird. Thank you.
Dr. Newton, I was really glad to hear you say something
about how important agriculture is to these local rural
communities. You factor the foundation that keeps the money
flowing, and when you talk about $1,100 an acre for a crop of
corn or $800 or so for soybeans, those are a lot of dollars
that are moving in that local community. So, I think having a
safety program and a safety net for farmers is what we have
been talking about here a great deal. It is extremely
important.
But I will ask you, then, to relate to how you see the
local programs working for farmers and ranchers, and give you
the opportunity to address those issues.
Dr. Newton. Thank you so much.
I mentioned earlier that we had a webinar with many of our
Farm Credit colleagues a couple weeks ago. The webinar was to
talk to them about ARC and PLC and how these programs function,
these risk management tools. And we really haven't had to have
that conversation for about a decade because these programs are
so out of date. It hasn't been a conversation that needs to
happen on the farm. We are finally seeing the guarantees under
ARC move up a little bit for some crops, but not all crops. I
think corn is going to see a higher guarantee. Soybeans are
going to see a higher guarantee, but there are other
commodities that are stuck at the support levels that they had
from over a decade ago. So, it is so important that these tools
are updated. Input costs have gone up 30 percent since we did
the last farm bill, and these reference prices really have not
changed. So, making that investment in the farm bill is
critically important.
Mr. Baird. So, I have about 50 seconds left.
So, Mr. Talley, the specialty crops are kind of a new area
for me, but I think it is important that we include them in the
farm bill and some of the listening sessions that GT has had, I
have been really interested in what has happened around
specialty crops and the need for--I think there is about 600
kinds of crops, and we only cover a very small portion of those
with crop insurance. You have 21 seconds.
Mr. Talley. Great, thank you. I can get it done.
No, there is a need, and like I said, the system--we
suggest that the system be revamped to better customize and
enable specialty crop producers to utilize the product, and we
look forward to working with the USDA to do that.
The Chairman. I thank the gentleman, and I now recognize
the gentlelady from the Sunflower State of Kansas,
Representative Davids, for 5 minutes.
Ms. Davids of Kansas. Thank you, Mr. Chairman, and thank
you to our Ranking Member.
Agriculture is the backbone of Kansas's economy, with our
state ranking as the eighth largest agricultural exporter in
the country, shipping more than $7 billion in beef, wheat,
soybeans, and other grains to markets all around the world. But
today, our producers are facing significant economic
uncertainty due to trade disruptions and inconsistent policy
changes.
Farmers depend on stable, long-term trading relationships.
Abrupt shifts in policy, like the President's threatened
tariffs on Canada and Mexico, would raise prices for farmers
and make it harder for them to plan for the future. We have
seen the consequences of trade instability before. When certain
tariffs were imposed during the President's first term,
American farmers lost roughly $27 billion in exports between
2018 and 2019, according to The Washington Post. Many had to
rely on USDA programs to stay afloat, putting a financial
burden on all hardworking Kansans.
To keep our agricultural economy strong, we need trade
policies that open doors for our farmers, rather than create
new obstacles. And at the same time [audio malfunction] the
recent Federal funding freeze uncertainty, it had real
consequences. Farmers who signed contracts with USDA programs,
investing their own money in fencing, new crops, and renewable
energy systems were left in limbo, unsure if [audio
malfunction]. The same is true for [audio malfunction] programs
for which Kansas producers supply a significant share of the
food distributed worldwide.
This isn't about politics. This is about stability and
opportunity for the [audio malfunction] farm that is in Garnet,
Kansas, and those farms all across the country where families
simply want to make an honest living and provide for their
loved ones.
That is why leaders on both sides of the aisle have spoken
out on the need for policies that support our agricultural
sector, and lower prices at the grocery store. We must work
together to provide certainty for our producers, strengthen our
global competitiveness, and trade partnerships, and ensure
Kansas farmers can continue doing what they do best, which is
feeding our country and the world.
The first question I want to ask to Mr. Weinzierl. Can you
just speak to--I may have missed this, but you spoke a little
bit to fertilizer issues earlier. How does that--can you talk
about some of the specific effects on your operation and some
of the--bringing up earlier?
Mr. Weinzierl. Yes. So, as we talked earlier, fertilizer
prices from--fertilizer as a cost is very large for a corn
acre, probably $300 would be the total fertilizer budget. For
soybeans, it is probably more like $100. The big difference
there is nitrogen, but both crops use potassium and phosphorus.
Of course, potassium is mainly imported from Canada. But with
the higher prices over the last several years of commodities,
all of those input costs went up. Commodities have gone down.
These input costs have been very sticky in coming down, and so,
we have not seen the fertilizer prices go to the level where
family farms can again be profitable.
Ms. Davids of Kansas. There seems to be a microphone--well,
thank you for that, and given the context that we are working
with in [audio malfunction].
Ms. Schwertner, I was hoping to hear about the lack of the
multi-year farm bill and uncertainty around potential changes
and policies. I know you have talked a little bit about
uncertainty, but if there is any specific areas of uncertainty
that you kind of wanted to touch on in these last 48 seconds?
Ms. Schwertner. Certainly. In you referencing the farm
bill, I think right now, we are relying a lot of ad hoc
programs to get us through. Relying on one-time payments to
help get us from one year to the next, and it has been a
problem for certainly the last 3 years since we saw a decrease
in commodity prices from 2022, and input prices as mentioned
have not come down as much as commodity prices have. We were
selling cotton for $1.20 in 2022, and now we are getting quotes
for less than 60 . So, that there speaks to the impact and the
urgency behind needing some updated farm bills to give us the
certainty that we need to continue to go and talk to our
bankers and secure those lines of credit to allow us to
continue operating.
Ms. Davids of Kansas. Thank you. I yield back.
The Chairman. I thank the gentlelady.
I now recognize the gentleman from Iowa, Mr. Feenstra, for
5 minutes.
Mr. Feenstra. Thank you, Chairman Thompson, and thank you,
Ranking Member Craig.
This is a great, great panel, and thank you, witnesses for
your testimony. I read all your testimonies, and I think we all
agree on the same thing, that we have a lot of concerns moving
forward. I look at the commodity prices right now. If we could
expand the export market, that would be wonderful. I think that
would help the commodities a lot. I think avian bird flu--I
mean, eggs at $7 a dozen right now. We have lost 24 million
birds in the last 4 months. I have the second largest egg
producer in my district, and then obviously the soft ethanol
market, Mr. Weinzierl, you noted that. I mean, there are a lot
of challenges.
And yet, we have this farm bill. We have this farm bill
that has this great opportunity and when we talk about crop
insurance, that safety net, exports, FMD, MAP that we could do,
foreign animal diseases, how we can start looking at this and
changing the trajectory of what is happening there. And then,
obviously, reference prices, right?
But there are a couple of things I want to talk about also.
To me, a real concern is the death tax. You think about the
death tax. This is an unfair tax that applies costly tax, 40
percent, on the transfer of property and land to the next
generation. Can you imagine that? I mean, here you got the
Federal Government double taxing where if you die and you want
to pass that land to your son or daughter, they are going to
pull out of the grave with their arms and say you owe 40
percent. Forty percent? This is ridiculous, and this is going
to affect our next generation.
Mr. Talley, if you could talk about this. Can you--you said
that you are a third-generation farmer. You recently welcomed
the fourth generation--congratulations, by the way. How will
this affect you as you move forward, and other farmers like
you?
Mr. Talley. Thank you for the question, Congressman.
Obviously, I am against the death tax. I see it, especially
in the specialty crop arena throughout all 50 states, something
unique about us is that our land values typically tend to be
much higher than other commodities. And something else that we
are seeing, at least in California and I think in other popular
areas where we are growing specialty crops, is the encroachment
of cities kind of outgrowing their limits, if you will, and
then all of a sudden our farms that we purchased for $\1/2\
million, say, 20 years ago, are now worth millions of dollars
because they are surrounded by a bunch of homes.
And so, that has proven to be difficult, as well as
remember, specialty crops are very, very expensive, highly
capital intensive. It is not only land costs, but it is also
the machinery, the buildings on the land that are terribly
costly. And so, that leaves us with very little cash.
And so, at the end of the day, the saying goes where we are
kind of cash poor. We are land rich and cash poor. And
something else you mentioned that we don't really value, if you
will. It is the sentimental value. It is the fact that I am a
fourth-generation farmer. I walked the same fields that my
grandfather and my uncle, and I probably would have with my
father but he passed away when I was 4. I still remember times
being with my dad at a young age on the family farm. And now, I
am walking the fields with my own sons and then passing along
that legacy.
Mr. Feenstra. It is special, isn't it? That is truly
special to have that. And yet, if we don't have the 40 percent
to pay, then it is going to go to some out-of-state buyer or to
a foreign adversary, China or whoever is buying it. I mean, it
is very scary stuff.
Mr. Talley. Absolutely.
Mr. Feenstra. Absolutely. I introduced the Death Tax Repeal
Act (H.R. 1301). We have 170 sponsors across the board,
bipartisan. This has got to get done.
I want to talk about also something that really, to me, is
affecting farmers right now, and that is the operational loan
costs, all right? We got a lot of farmers going to the bank
right now and getting that operational loan to start planting
this spring. And yet, here is our problem. The interest on that
loan is very expensive, and this, to me, it is a safety net.
How can we lower interest rates? How can we lower real estate
loans, and we can. It is called the ACRE Act of 2025 (H.R.
1882, Access to Credit for our Rural Economy Act of 2025) by
lowering interest rates.
I want to ask Mr. Weinzierl, what is your thoughts on this?
I mean, do you see this as something productive for the farming
community if we can lower interest rates, if we can lower some
of their costs on these operational loans?
Mr. Weinzierl. Yes, lower interest rates especially would
help young farmers who are not near as capital wealthy, and so,
anything that could be done around that especially for young
farmers. My own daughter has an FSA loan, but she has been
challenged. She got married, which is a good thing, but because
of FSA loans, they look at the net worth, and for her to change
a commercial operator to a lower rate, she would have to redo
the loan. That net worth would throw her out because she got
married.
Mr. Feenstra. My time has run out, but I am telling you,
the ACRE Act, we got to get this passed. It is another one of
the things that we just got to get done, along with the farm
bill.
Thank you, Mr. Chairman, and I yield back.
The Chairman. I thank the gentleman.
I now recognize the gentleman from the Empire State of New
York, Mr. Riley, for 5 minutes.
Mr. Riley. Well, thank you, Mr. Chairman. I am very much
looking forward to working with you. It is an honor to be on
this Committee and----
The Chairman. Check your microphone there. You need to push
the button on the bottom.
Mr. Riley. You can tell I am new here. I am the new guy, so
we are going to figure this out.
Mr. Chairman, thank you. I don't know how much my
incompetence takes away from time, but it is an honor to be on
the Committee. I am looking forward to working with you.
Dr. Newton, I really appreciated in your testimony, you
talked a bit--in your written testimony, anyway, you talked
about the consolidation we are seeing in the dairy industry. In
the last 25 years in upstate New York, we have lost about \2/3\
of our dairy farms, and we have actually seen that trend
accelerate in recent years from, I think it is 2017 to 2022, we
lost about 40 percent of our dairy farms. So, I have about 300
dairy farms left in my district, and they are just getting
crushed by these big farms that are getting bigger and bigger.
And now it is like you have to get huge to survive. I saw some
data showing that if you have over 500 cows, you are very,
very, very likely to make a profit. If you have less than 100,
you are almost certain to lose money.
And so, my question for you is whether you have any
suggestions for us as the things we can do as a Committee to
address those trends and save our small family farms? And
related to that, I wonder if you could comment on whether the
consolidation we are seeing in the industry is increasing
public health risks with things like, for example, the bird
flu? It seems to me that if you have fewer bigger farms, you
are increasing those risks. If you are literally putting all
your eggs in one basket and that basket ends up with bird flu
or an issue, it seems like that is compounding the risks. So, I
was hoping you could talk about both of those issues.
Dr. Newton. I was waiting for a dairy question. It took us
a while to get there.
Mr. Riley. And it took us even longer, because I couldn't
figure out how to work the microphone.
Dr. Newton. For dairy farmers, they have a very important
safety net. The Dairy Margin Coverage Program has been an
effective safety net for dairy farmers. Since it was reformed
in the 2018 Farm Bill, I think there is a need to consider how
that is working. Could it work even better for dairy farmers?
That is one area.
I think another aspect that we haven't talked a lot about,
especially with these small dairy farmers, is their utilization
of crop insurance. Dairy Revenue Protection, which I developed
when I was at American Farm Bureau, very successful insurance
product for the dairy industry, but how can we increase
awareness and education to those small- and medium-sized dairy
farms so they know that this product can work for them and help
them manage their risk?
So, that is the answer to your first question.
As to the second question on bird flu and the size of the
operation, I would be happy to consider that in a QFR. I don't
have an answer for that today.
Mr. Riley. Yes, that is great. I would love to work with
you on increasing awareness for programs that our small dairy
farmers could take advantage of.
I will say one of the takeaways from reading the testimony
and hearing from all of you today, my biggest takeaway for this
hearing is that our family farms are operating with razor-thin
margins. We have seen net farm income decreasing. I know that a
lot of farmers are looking to this new Administration to
reverse those trends.
Each of you, both in your written testimony and in your
testimony today, mentioned the challenges of high input costs,
and I am very concerned that the President's proposed tariffs
on Canada are doing to do more harm than good for a lot of our
farmers, and that is especially when you look at the charts,
Mr. Weinzierl, in your testimony showing the impact of the
rising fertilizer costs.
I heard today one of the statistics that really stood out
to me is that Canada is providing 90 percent of the fertilizer,
potassium, the potash that we are using in America, and so, I
have a letter that I am leading to the Administration. I tended
to agree with some of the testimony earlier that when we are
talking about tariffs, we shouldn't be looking at it just writ
large. We should be looking at it specifically item by item and
determining on a cost benefit basis whether particular tariffs
are helpful or harmful. I am convinced that the tariffs on
potash are going to be very harmful, given the high input costs
and the costs of fertilizers. So, I have a letter that I am
leading to the Administration, asking it to exclude potash from
any tariffs that end up being imposed on Canada, and I would
just like to invite all my colleagues to join me in that.
And I will yield back the rest of my time. Thank you all
for testifying. This has been very helpful.
The Chairman. I thank the gentleman.
Now I recognize the gentleman from the Keystone State of
Pennsylvania, Mr. Bresnahan, for 5 minutes.
Mr. Bresnahan. Thank you, Mr. Chairman. I want to start out
by saying how excited I am to be working with you and support
our Pennsylvania farmers, producers, and diverse agricultural
industry.
Last month, I had the pleasure to visit the Pennsylvania
Farm Show where I got to speak with some of these farmers and
producers from all over the Commonwealth, and sample everything
from milkshakes to apple cider slushies to potato donuts and
deep-fried mushrooms. It was truly remarkable just to hear how
much work goes into bringing these products from the farm to
our tables. Just as remarkable was hearing how many of these
farms were family-owned and multi-generational.
The most common thread that I hear from farmers while
traveling around my district in northeastern Pennsylvania is
the desire to keep their family farm in the family and pass it
down to the next generation. This speaks directly to me, as I
am a third-generation family business owner. I went from first
generation to third generation in the heavy highway electrical
space, so I am relatively new to agriculture, but understand
the significance of what we do here, and do appreciate all of
your testimony here today because it does speak heavily when we
hear it directly from the source.
My first question is actually for Ms. Schwertner. You made
a lot of references to the banks, and something that we had to
deal with going from a first generation to a third-generation
family business was the bar was always moving. You are coming
from the agriculture industry, so how do you collateralize your
farms and how have you been able to secure and alleviate the
agita that the banks would sometimes create?
Ms. Schwertner. Thank you for your question, and as a new
and beginning farmer--still considered a new and beginning
farmer, it has certainly been challenging. We have had to rely
a lot on our partnership that we have with my father-in-law and
my mother-in-law to help with building that collateral to earn
the opportunity to gain credit and to increase that line of
credit. And so, it is certainly a challenge that I think all
new and beginning farmers face with the lack of collateral
coming into the industry. It is high input costs, high cost to
enter, and unless you have some assistance from someone who is
already doing it or some other program that you have access to
help, it is certainly challenging to enter in as a new and
beginning farmer.
Mr. Bresnahan. Especially when you are trying to buy a
piece of equipment, the cap-ex. I mean, are you able to usually
collateralize the new cap-ex piece of equipment purchase off of
the equipment itself, but then you also need to sustain your
operations and cash-flow so you make your monthly payment on
time. Have you seen the escalation of this equipment increase
drastically over the last few years?
Ms. Schwertner. Yes, yes. Certainly. You are referring to
the cost?
Mr. Bresnahan. Tractor, combine, whatever that case may be,
and the availability. Are you able to go out and buy one at
that moment if you wanted, or is there a longer lead time?
Ms. Schwertner. We could certainly go find one. There
certainly is a market for it. I think currently the challenge
is affordability and the ability to invest in equipment. It is
certainly not something that we are looking at right now, given
the current state of things.
Mr. Bresnahan. So, I guess this pivots into my question for
Mr. Talley.
In the construction business, we are constantly looking for
new technologies to make our jobs more efficient, less labor-
intensive, more precise. In your testimony, you advocated for
additional research and development into the automation
technologies for the specialty crop sector. Can you tell me
more about some examples of recent technological developments
that either you, yourself, or another specialty grower have
implemented, and how has it worked?
Mr. Talley. Sure, I would be happy to.
As I alluded to earlier, California spent over $16 billion
in labor alone. Two-thirds of that was in the harvesting, and
to me, that is the critical area where we need automization,
mechanization, or whatever that might be. Once again, there is
no silver bullet because each commodity within the specialty
crop industry is harvested in a different manner. But just
simple harvest aids, aids that would make the job easier, more
ergonomic, and save a handful of jobs here and there, at the
end of the day, that has been tremendous.
We have a new belt that we use that probably in our 14
person crew, it dropped it down to about 11 individuals now
because it has increased our efficiency.
Mr. Bresnahan. From 14 to 11?
Mr. Talley. From 14 to 11. So, it is little steps like
that. Like I said, there is not going to be a silver bullet.
There is not going to be an instant cure for labor needs to go
away, but it is just drip, drip. It is investment, investment
in mechanization and automization that is critical for us.
Mr. Bresnahan. I appreciate that, and I yield my remaining
8 seconds.
The Chairman. The gentleman yields back.
I am now pleased to recognize the gentlelady from Maryland,
Mrs. McClain Delaney.
Mrs. McClain Delaney. Thank you to all. Thank you to our
chair, and all of you here, but particularly to all of the
panelists who have been here for over 3 hours. So, really,
really important.
So, I have really enjoyed this. I represent the 6th
District of Maryland, which is an incredible district in terms
of the number of farmers we have, almost \1/2\ million acres of
farmland, including 178 dairy farms and 3,500 family farms. We
are also home to the Montgomery County Agricultural
Preservation District.
Before this hearing, I talked to our Frederick County Farm
Bureau and the Maryland Farm Bureau, really discussed the
challenges facing family farms, importance of crop insurance,
ReConnect and EQIP. But I guess most importantly, I am a fourth
generation Idahoan from Buhl, Idaho. My dad was head of the
Idaho Potato Commission, and we had a family farm. And I have
to say, Dr. Newton and Ms. Schwertner, it was really important
to me because in the 1970s and 1980s, it was sky high interest
rates. It was really hard. The cost of production was below the
cost of what you could sell your crops for, almost 5 years. And
actually, access to capital and credit was really important,
and ultimately, my family lost the farm. It was a really
terrible thing that is awful for those of us who want family
farms.
So, just as--this was not my anticipated question. I will
talk to you about rural broadband in a second, but looking over
the legislation the past 3 or 4 years, there has been a lot of
different ways of looking at innovative access to capital. If
you all could just very--I am going to submit some things for
the record, but if you all could just think of one thing or one
correction, how would you, in this farm bill or in other
innovative ways, look at better access to capital from our
banking, our different banks, and is there anything you would
do that you could clarify in this 119th session that you would
like to see in terms of improving access to capital for
farmers, in addition to commodities and crop insurance and the
things that we have?
Mr. Weinzierl. So, one thing my daughter has brought up,
and a lot of the young farmers coming in to farming now are in
their 30s and maybe even 40s. They are connected to the farm,
but they have also had careers up until then, and land, as it
has been talked about, is very expensive. Her question to me
is, ``Gee, Dad, the farmland that you have is really your
retirement program. I have access to building a retirement
account in my professional career.'' Is there any way that it
could be changed so that putting a down payment on a farm could
be viewed as a retirement account and you could just shift from
the 401(k) to use that as a down payment on a farm, for her to
do that now? She is not 59\1/2\. There is a penalty to that,
but she sees the value of being able to make that investment
and looking for more flexible ways, innovative ways to try and
do something like that.
Mrs. McClain Delaney. And I think for my time, I am going
to submit that for the rest of the record for you, because I
would really like to figure out some ways to increase and
really work on those issues in terms of finance and capital.
So, bulk of my life I spent in telecom as an online child
advocate telecom attorney, and most recently I served at NTIA
as deputy assistant secretary rolling out our broadband and our
rural broadband. And, broadband access allows kids to go to
school and access to healthcare.
But in my district, more than 20 percent of farms lacked
internet access, and many of these rural communities are
disconnected, they are left behind. USDA, the ReConnect
Program, the affordability, the key to connect. I will just
kind of throw it open to you all. Without a bipartisan
modernized farm bill, these programs could be jeopardized.
Can any of you speak a little bit about how farmers are
using data and technology on and around the farm? Is there ways
to cut costs with it, and what is a broadband or lack of
broadband access, which is affordable, high-speed access, do to
a farm's bottom line? And, obviously with these freezes, what
will that mean for connectivity and how that will impact you
all?
Ms. Schwertner. Thank you for your question. I will take it
with just a few minutes remaining.
First, I want to thank you for your Farm Bureau engagement
and communicating with your local county Farm Bureaus. That
means a lot to me, serving on my county Farm Bureau, and that
is certainly where change starts for the Farm Bureau
organization.
But to answer your question, rural broadband helps me in my
day job. I am fully remote. It allows me to contribute back to
our operation. Additionally, it helps with our farm
efficiencies as we are looking at data to continually improve
the efficiencies that we have on our operation.
Mrs. McClain Delaney. So, I have two or three questions
that I will just submit for the record for a lot of you.
The Chairman. I thank the gentlelady.
Mrs. McClain Delaney. There has been a lot of great
conversation.
The Chairman. I thank the gentlelady.
Votes have been called. There are two votes. I am told the
first one will be strictly held to 15 minutes, but I am going
to yield--we are going to recognize the gentleman from
California for 5 minutes of questioning, but--and then we
will--we are going to recess and reconvene as quickly as that
second vote is offered. If you could vote and then come back
here so that we could continue on.
Mr. LaMalfa.
Mr. LaMalfa. Thank you, Mr. Chairman. I will try and do it
before.
Dr. Newton, you emphasized earlier that with the California
tree nut growers that we are looking at Australia's trade deals
and how they have had great impact on nut exports, as they have
done a pretty good job muscling in on major markets over there.
This affects walnuts, who have been devastated recent years and
only now look like they are recovering. Almonds have had a
rough go, and I know a whole bunch of almond acres that are
underwater right now in my area. They can't take more than a
week or 2 of that, as well as some pecans.
What do you think we should be doing--you may have answered
this already. I have been in and out of the Committee, sorry--
to get this playing field leveled with such hot competition
from Australia and maybe others with really what is unbalanced
foreign competition?
Dr. Newton. Thank you so much for the question.
Our analysts at Terrain do see the almond market, the
walnut market finally starting to turn around coming out of the
pandemic lows and the challenges that those growers faced. But
I will go back to what we have talked about before. Investing
in trade promotion and market development programs as part of
the farm bill will help those growers go out and find and
continue to develop those markets around the world.
Mr. LaMalfa. All right. I believe we got good work in the
farm bill if we can get the good one done, Chairman and Ranking
Member, we are going to be sure to get there this year.
Let me jump over to Mr. Talley here. We haven't talked
enough about the AEWR, the Adverse Effect Wage Rate for H-2A.
It has skyrocketed the last few years. Four out of the last 5
years, it has gone from about 7.3 percent annually, and so, the
fruit and vegetable growers are the largest users of H-2A, as
well as some others, and they spend about, I don't know, over
\1/3\ of their expenses on labor like was established a bit
earlier. So, California bit the big AEWR increase. How much
farther can this go, and I am going to give that, again, to Mr.
Talley. How long can these keep going and then have any chance?
California's hourly rate for labor has now reached the 8 hour,
40 hour limit a week this year. So, how do we keep doing all
this?
Mr. Talley. Quite honestly, the meteoric rise in the wages
in the AEWR, it is not sustainable. You are seeing for the
first time last year the numbers in H-2A usage have kind of
gone flat, and maybe even gone down due to the sheer fact that
this year, it is at $19.97. California's minimum wage is at
$16.50. In effect, $19.97 is now our minimum wage at our family
farm, and when you compete against not only just other states
that have $2 to $3 less an hour wages, but also, you are
competing internationally where the wages are a fraction of
that cost.
I just spent some time in Costa Rica at a farm, and I asked
them what their minimum wage was. They said oh, $4, $4.20. We
can't compete with that. It is not sustainable.
Mr. LaMalfa. Can't touch this, right?
Mr. Talley. Yes.
Mr. LaMalfa. So, let's talk about mechanization for a
moment here, as we have also put some research dollars towards
that through some of our efforts here. Talk about ag
mechanization and why is that going to be perhaps very vital as
well for specialties?
Mr. Talley. The mechanization component, that is, in my
mind, that is where our strength lies, where we have the
ability to really create change and build an efficiency in our
program. Our labor wage, it is what it is. I don't necessarily
see it dropping. It would be nice if it did, but that is not a
reality.
So, to mechanize and to be able to be competitive on the
international scale, it is of utmost importance. If we want to
continue to have agriculture in our country, we have to
mechanize. I mean, there is no way around it.
Mr. LaMalfa. Yes, a lot things coming at us at once.
Mr. Chairman, I will yield back. Thank you.
The Chairman. The gentleman yields back.
The Committee will stand in recess until the call of the
chair immediately after the second vote on the floor.
[Recess.]
The Chairman. The Agriculture Committee hearing will
reconvene, and I am pleased to recognize the gentlelady from
Texas, Congresswoman De La Cruz, for 5 minutes.
Ms. De La Cruz. Thank you so much, Mr. Chairman.
The Chairman. I think your--press your microphone there on
at the bottom.
Ms. De La Cruz. Oh, there we go. Excellent.
Thank you, Mr. Chairman, for hosting this important hearing
today, and thank you to all the witnesses for being here
throughout the day and joining us and sharing with us your
concerns about the economic crisis that is happening all across
America.
As we are looking at the economic crisis for our farmers
and ranchers, I am going to specifically talk about what is
happening in my district. In my district, our farmers and
ranchers are really suffering due to the Mexican Government's
failure to deliver water as per the 1944 Water Treaty
(Utilization of waters of the Colorado and Tijuana Rivers and
of the Rio Grande). This has been devastating for our region.
In fact, each day, this devastation continues. Mexico now owes
us over 1 million acre feet of water. It is practically
impossible for them to pay us that much water at this point.
How we have suffered is that we have lost our sugar growers
in the Rio Grande Valley. We were the only sugar growers in the
entire State of Texas. Now, that is gone. That only leaves two
other states that have sugar mills, and this is devastating,
not just for our area where it meant millions of dollars of
loss, but it was also 500 jobs that were lost because of this.
And all of the jobs and businesses downstream. This sugar mill
closed after 50 years of service to the Rio Grande Valley, and
it is absolutely devastating.
Because Mexico has not complied with the 1944 Water Treaty
and given us the water that we so depend on, we are about to
lose our citrus industry as well. You all know that Florida has
had a tough time in citrus, so America is really dependent on
the Rio Grande Valley and the State of Texas to deliver the
citrus that we need.
So, as we say here on the Agriculture Committee, food
security is national security, and when we are depleted of
sugar, of citrus, of other vegetables in our area, what that
means is that we are going to be dependent on foreign countries
to feed Americans. We don't want that. We want American farmers
to feed Americans, and this is why the topic of agriculture,
economic loss, water loss for us as per this water treaty is
so, so important.
I can share with you that I am proud to have secured
language at the end of last year in the last Congress granting
the Secretary of Agriculture the authority to provide grants
for economic relief to agriculture producers in south Texas
that are affected by this issue. So, my farmers in deep south
Texas have compounding problems. They have economic pressures.
They have burdensome regulation that are weighing down on them,
and they have the 1944 Water Treaty where they are not
receiving the water that they need. While this disaster
assistance through the appropriations language that we put into
the 2025 appropriations is going to help, so much more still
needs to be done. So, I look forward to working with my
colleagues across the aisle for a strong farm bill, because it
is of urgent need.
Now, I am going to ask--I am going to mispronounce your
name. Please help me.
Ms. Schwertner. Schwertner.
Ms. De La Cruz. Schwertner, there we go. Your testimony
touched on how the U.S. is continuously losing more and more
family farms. I know how this has affected my district. Can you
tell us about the impacts of losing family farms in your
community?
Ms. Schwertner. Certainly. Thank you for your question.
I think there is a statistic out there that we are losing
roughly 1,000 family farms a month, and that is alarming, being
a family farm of my own thinking that that could be us one day,
and I certainly hope that it is not. And so, as we continue to
look at that data, the impact of losing family farms or any
farms is certainly detrimental to our national security, just
as you have mentioned. Being able to feed our country and our
nation is so important. It is part of our overall GDP as a
country, and certainly, agriculture contributes so much to the
success of our nation and to the success of our communities in
ensuring that the businesses and the people in our local
communities are also successful.
Ms. De La Cruz. Thank you. I yield back.
The Chairman. I thank the gentlelady.
I now recognize the gentleman from California, Mr. Gray,
for 5 minutes.
Mr. Gray. Thank you, Chairman Thompson, Ranking Member
Craig for holding this hearing, and thank you to our witnesses
for participating in this long morning. I appreciate your
insights.
My district is in California's Central Valley. I represent
five counties in the northern San Joaquin Valley, and grew up
in agriculture myself. My family is in the dairy business. We
also grow almonds and pistachios. I am excited to be here
participating on the Agriculture Committee, and hoping--it is
my first term in Congress and I ran for this office after the
118th Congress, one of the most unproductive in U.S. history,
failed to get a farm bill. And folks in my district work very
hard, and certainly looking to Congress to work hard to land a
farm bill this session. I am hopeful to be part of that.
Certainly, a lot of important work to do, and we have heard a
lot today about some of the folks on this Committee where there
seems to be an appetite for bipartisanship and working
together, and I hope to certainly be part of that as well.
In my district we grow some of the highest quality cotton
in the world, and I have heard concerns recently about the
long-term prospects for funding for the Pima Cotton and Wool
Trust Fund. And so, my first question for Ms. Schwertner is as
a cotton farmer yourself, can you speak to the importance of
programs like the Pima Cotton and Wool Trust Fund?
Ms. Schwertner. Thank you for your question.
I can't speak specifically for Pima cotton. I can speak for
general cotton programs, but I am not familiar with that. But I
am happy to respond in writing.
Mr. Gray. I appreciate your insights on that.
I think the long-term stability and predictability for
farmers, like any other industry, is critical and hopefully
that will be top in mind for folks on this Committee as we move
forward.
Another major issue in my district recently, just as
recently as last week, has been the spread of bird flu, and we
just, in fact, had a new strain detected in Merced County,
which is my home county within the district. And we have
certainly talked a lot around the country about the price of
eggs, but the poultry industry is pretty concerned on this
issue.
Question to Dr. Newton. What are the risks for us in not
tackling this problem urgently and expeditiously?
Dr. Newton. Thank you so much for the question.
I mean, the outbreak that we are currently experiencing on
the bird flu, I mean, we have over 11 million birds confirmed
just to start this year alone. You mentioned a new strain for
dairy cattle, and then we have seen detections in the boiler
flock in the Southeast. So, it is incredibly important to get
this under control. The impact on food availability and food
prices is top of mind.
Mr. Gray. I appreciate that.
Mr. Chairman, I yield back my time.
The Chairman. I thank the gentleman.
I am now pleased to recognize the gentleman from Iowa, Mr.
Nunn, for 5 minutes.
Mr. Nunn. Well, thank you very much, Chairman and Ranking
Member, for holding this very important hearing today.
To each of you, look, I represent 87,000 family farms back
in Iowa, and we recognize this is bigger than any single farm,
any single bigger community, any single state. This is truly
something that is going to impact the entire nation, and we
either have the ability to help defend our food and fuel
supply, or we have the ability to acquiesce and allow somebody
else to fill the void. It is not only a national security
threat, but puts us directly dependent on foreign entities and
how we feed our families.
Now, I know we have been short on time, Mr. Chairman, so I
want to get straight to it. We are going to drive like a
combine driver with an ice storm coming up during harvest
season.
A couple of direct questions. Mr. Weinzierl, I feel
obligated to come to you first as a fellow Midwesterner here.
You have planted corn, soybeans. You know this in Illinois,
just like in Iowa, row crops are a big deal. The importance of
access to foreign markets here in the U.S., in your testimony,
you highlighted the U.S. is facing its fifth consecutive annual
trade deficit. In fact, I think we are up to about $100 billion
now, largest in the world.
Mr. Weinzierl, what will happen to our corn and soybean
farmers if we fail to pass a farm bill that includes additional
MAP and FMD funding?
Mr. Weinzierl. Well, thank you for question.
As we have emphasized several times, I think the whole
panel, I think the importance of getting that funding for MAP
and FMD is crucial in continuing to open up markets and to
maintain the relationships with countries that we are currently
marketing to. So, I think that is the one thing that, with a
lot of uncertainty around trade, if we can have that as
certainty, that will definitely help in putting boots on the
ground all around the world.
Mr. Nunn. Critically important. For the last 4 years, we
haven't had a single farm trade deal done. I hope we can get
more done here in the next 4 months.
Look, Mr. Weinzierl, you know this. A bushel of corn today
runs about $4.90 on a good day. A bushel of soybeans, probably
about $10+. The challenges that we have are these prices are
reflective of a severe decline in farm communities. Sixth
generation farm kid from Iowa here. This is a deficit 15 years
in the making.
Had the improvements this Committee had already passed on a
bipartisan basis on last year's farm safety net been
implemented for crop this year, any indication as to whether it
would have been better or worse as we head into the next year?
Mr. Weinzierl. So, at least the data I have seen, it would
have been slightly better for Illinois corn farmers and soybean
farmers. Not to the magnitude that I think is needed. I really
applaud the Committee's efforts and Members and what they did
in the ad hoc program. That was much more substantial, probably
at least twice the impact of what we would have seen. But also,
because the payments were tied to just months later, not tied
to a marketing year. That makes a big impact as well. And then
because it was tied to planted acres, it really directly
affected the costs that we are seeing and the high prices and
addressing that issue.
Mr. Nunn. I could not agree with you more, and while it
would have been a step in the right direction, I applaud the
Members on both sides of the aisle on this Committee. There is
a lot of work that needs to be done to make sure we can make
this sustainable going into the future.
Ms. Schwertner, thank you again for your service on this,
your family's legacy directly impacted by our current financial
conditions that have hit this country.
Before the end of the year, Congress passed a spending
package that included necessary assistance for our farmers. Did
these payments serve as an adequate replacement for the farm
bill?
Ms. Schwertner. No, they do not.
Mr. Nunn. And I would fully agree with you on that. No,
they do not. Not a single farmer in Iowa believes that. I am
certain back in Texas it is the same way.
Farmers in my district have shared the same sentiment. It
has been 7 years since Congress passed a farm bill, 7 years
since our farm safety net was updated.
Ms. Schwertner, if the farm safety net had been aligned to
today's costs, would the ad hoc assistance have been necessary
for you?
Ms. Schwertner. No, it is not necessary. With adequate farm
safety net, that certainly prevents us from needing the ad hoc
assistance.
Mr. Nunn. I appreciate that. To everybody's farm district
back home, I want to thank you very much for being here. At the
end of the year, we were able to get financial emergency
assistance out to those farmers, including in my home in
Greenfield, Iowa, that got devastated by a tornado, to help get
back on their feet. But that is not the solution. We have to
have a long-term strategy here to address America's food
security that starts right here in the United States. To all
the Members on this, I really appreciate your leadership in
bringing it forward.
Thank you, Mr. Chairman. I would yield back.
The Chairman. I thank the gentleman.
Before we adjourn today--no one else here has not asked
questions--I invite the Ranking Member to share any closing
comments that she may have.
Ms. Craig. Well, thank you so much, Mr. Chairman, and I
would like to start with a big thank you to you for calling
this hearing so early in the 119th Congress, and especially to
our witnesses, who have had a very long day of answering our
questions. You have been pretty patient with us, so thank you.
This hearing has, again, put a spotlight on the reality
that farmers across this country face every day. High input
costs, challenges in domestic and international markets,
natural disasters, the list goes on. We absolutely need to
reauthorize a new farm bill.
My colleagues, I still believe in the possibility of
bipartisanship from this Committee, even in a town that tries
everything else first. And I know we all want good policy with
support for our farm programs and strong nutrition safety net
for Americans who need it. That is how we get to a bipartisan
farm bill.
My commitment to Minnesota and farmers across our nation
has always been to work with an Administration when it is right
for them and to stand up to one when it isn't. I did not
believe the Biden Administration focused enough on expanding
trade, and they didn't prioritize renewable fuels nearly
enough, and I told them so publicly. And I also have a
responsibility to point out that I believe this new
Administration's early actions are implementing early policies
that could potentially hurt our family farmers and ranchers. I
sure hope not, but it feels that way.
The freeze of EQIP and REAP dollars already obligated to
farmers and ranchers, the across-the-board tariff threats on
our largest trading partners, the $2.1 billion USAID market
that would go away if this program went away, and the
discussion around cutting the Supplemental Nutrition Assistance
Program. Given the tough economic climate and thin margins,
farmers don't need new problems, especially those manufactured
in Washington.
Mr. Chairman, I believe that you and I and our great
partners in the Senate, Senator Klobuchar and Senator Boozman,
can figure this out if left to our own work, together with our
own Members. But I am worried that the reconciliation process
might impact our ability to get a farm bill, and I would be
remiss if I did not say that out loud here today.
The Chairman and I are going to keep at it together.
Farmers, lenders, rural communities, and those who need help to
put food on the table are watching and waiting. Let's not
disappoint them.
Thank you, and I yield back.
The Chairman. I thank the Ranking Member.
I think the word that came up the most here at this hearing
today is uncertainty, and uncertainty around input costs,
commodity prices, and yes, of course, trade disruptions. The
single-most important thing this Committee can do for our
farmers and ranchers is to reauthorize the farm bill with an
improved safety net, and that is what this Committee will be
working towards in a bipartisan way in the 119th Congress.
I fully understand that the uncertainty for our producers
with regards to tariffs, trade, and how this all unfolds is
headed--storm clouds on the horizon for our producers, but I
will remind my colleagues that in his first term, President
Trump was able to renegotiate more favorable terms for USMCA,
and let us not forget about the Phase 1 China deal, which I
will point out that the Biden Administration never held China's
feet to the fire and China continues to not meet those
commitments. That is in addition to new non-tariff barriers
being erected around the world, like non-science-based
environmental regulations in the EU.
The current playing field is not level for our producers,
and righting this ship will not be an easy task. But we cannot
let the almost $100 billion in total trade deficits experienced
over the past 4 years continue to widen and worsen. Keep in
mind that simply rightsizing the expected trade deficit of $45
billion in 2025 would provide more support and more certainty
to our farmers than the entire end of year package. I urge the
Trump Administration to aggressively pursue new access to
markets and be prepared to stand by our farmers and ranchers if
these disruptions start impacting their bottom line.
We have--I think we all celebrate the bridge that we were
able to accomplish in December. It is just a bridge. The more
than $20 billion in weather-related assistance, the $100
billion in economic disaster relief, which was somewhat
unprecedented--I am very proud of what we were able to deliver
for the American farm and ranch family.
We need Brooke Rollins to be confirmed by the full Senate,
this week preferably, as soon as possible. She was--she got a
unanimous vote in the Committee, and so, it is--I am just
encouraged that her confirmation vote will be scheduled in the
Senate as soon as possible, preferably this week. And we need a
5 year farm bill sooner than later.
I am of the belief--and I think for good reason--if we wait
until the end of this year to do a 5 year farm bill, we will be
back asking Congress for more economic disaster assistance. If
we are able to get this farm bill done sooner than later, it is
not going to be necessary. Our farmers don't--they want to be
able to farm and prosper with what the industry is, and so, I
know that $10 billion is welcome, but that is ultimately not
what they want. They want to address some of these pressures
and challenges that are out there on them, and that is our job
to do that. Whether we are talking--whatever we can do to
influence commodity prices, that would be--trade would help
with that, lowering input costs, addressing this 46 percent ag
trade deficit, turning that back around into a surplus.
Workforce was mentioned today, and I am very proud of the
Agricultural Labor Working Group that we put together. We got
some great recommendations in the 118th Congress and I think it
is going to be--those reforms to the H-2A Program are going to
be the basis of some great legislation that we will be
drafting.
I want to thank all of our witnesses here today for their
time and their testimony. We know that times are tough for you,
your family, and your local communities, and this Committee
will be working tirelessly to address the issues that you all
have raised here today.
I just want to take an opportunity to thank all of our
staff, too. The personal office staff, your agriculture--those
who handle that portfolio on your--in your offices, our
Committee staff on both sides of the aisle, and just bottom
line is we couldn't do this without you. So, a big thank you to
all of our staff.
And with that, this hearing is adjourned.
[Whereupon, at 2:34 p.m., the Committee was adjourned.]
[Material submitted for inclusion in the record follows:]
Submitted Article by Hon. Austin Scott, a Representative in Congress
from Georgia
[https://www.fb.org/market-intel/disaster-assistance-fuels-2025s-farm-
income-rebound]
Disaster Assistance Fuels 2025's Farm Income Rebound
Feb. 10, 2025
Daniel Munch,\1\ Economist
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\1\ https://www.fb.org/author/daniel-munch.
Largely driven by a surge in disaster and economic government
assistance, USDA's latest farm income forecast \2\ projects a
significant but misleading rebound in net farm income for 2025, rising
to $180.1 billion--a $41 billion (29.5%) increase over 2024 and
following 2 years of sharp declines. USDA also adjusted its 2024
estimate downward in this update,\3\ now projecting net farm income at
$139.1 billion, reflecting an $8.2 billion (5.6%) decline from 2023.
This is lower than the $140.7 billion (a $6 billion, or 4.1%, decline)
forecast in December 2024,\4\ showing that farm sector profitability in
2024 was weaker than previously estimated.
---------------------------------------------------------------------------
\2\ https://www.ers.usda.gov/topics/farm-economy/farm-sector-
income-finances/farm-sector-income-forecast.
\3\ https://www.ers.usda.gov/topics/farm-economy/farm-sector-
income-finances/farm-sector-income-forecast.
\4\ https://www.fb.org/market-intel/2024-farm-income-decline-
confirmed-in-usda-update.
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The assistance driving farm income projections up was authorized by
Congress to offset financial losses farmers and ranchers endured in
previous years. However, many producers are still waiting for details
on when and how these funds will be distributed, creating additional
financial uncertainty as unpaid bills from 2024 continue to pile up. As
a result, viewing the 2025 forecast in isolation misrepresents the true
health of the farm economy, which will remain challenged in 2025 by
generally low commodity prices and widely uncertain market conditions,
including the potential fallout from new trade policies such as tariffs
that could disrupt key agricultural export markets and increase input
costs for U.S. farmers.
When adjusted for inflation, the net farm income increase from 2024
to 2025 is somewhat less dramatic, rising by $37.7 billion (26.4%). If
realized, net farm income would be above its 2004-2023 inflation-
adjusted average but slightly below record highs set in 2022.
Figure 1: Net Farm Income
With and Without Federal Support
U.S. Farm Sector Net Farm Income, Billion Dollars
F = Forecasted.
Source: USDA ERS, Farm Bureau Calculations.
Disaster Assistance Drives Rebound
The key driver behind the forecasted increase in 2025 net farm
income is the surge in direct government payments, which are expected
to reach $42.4 billion--a 354.5% increase from 2024's $9.3 billion.
This sharp rise is primarily due to ad hoc disaster relief and economic
assistance included in the newly enacted American Relief Act of
2025.\5\ The [A]ct provides $31 billion in one-time aid, including $21
billion to compensate farmers and ranchers for natural disaster losses
sustained in 2023 and 2024, $10 billion to support struggling producers
facing economic hardship and $2.5 billion for USDA-administered
programs. Please refer to Farmers Head into 2025 with Another Farm Bill
Extension, Aid \6\ for additional details on the American Relief Act of
2025.
---------------------------------------------------------------------------
\5\ https://www.congress.gov/bill/118th-congress/house-bill/10545/
text.
\6\ https://www.fb.org/market-intel/farmers-head-into-2025-with-
another-farm-bill-extension-aid.
---------------------------------------------------------------------------
These funds are part of a broader expected increase in ad hoc
disaster payments (temporary, emergency payments issued outside
standard farm bill programs), which are expected to total $35.7 billion
in 2025, up from just $4.35 billion in 2024, a 720% increase.
Traditional farm bill support programs \7\ such as Agriculture Risk
Coverage (ARC) and Price Loss Coverage (PLC) are also expected to
contribute to the total increase in government payments, though on a
much smaller scale. Combined, these payments are projected to rise to
approximately $1.6 billion in 2025, more than triple their 2024 levels,
but still reflecting the anemic anticipated payout from a 7 year old
farm bill.
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\7\ https://www.fb.org/market-intel/farm-bill-title-i-commodity-
programs-arc-plc-and-marketing-assistance-loans.
---------------------------------------------------------------------------
While these safety nets provide stability, they do little to
mitigate new trade risks. The U.S. has raised tariffs on China while
delaying potential tariffs on Canada and Mexico until March, with more
under consideration. Farmers fear escalating trade tensions will reduce
export demand and drive-up input costs. Between 2018 and 2020, the
first Trump Administration allocated over $23 billion through the
Market Facilitation Program to offset farm losses caused by trade
disruptions, highlighting the significant financial impact of past
trade conflicts.
This anticipated increase in ARC and PLC payments \8\ is primarily
due to projected declines in commodity prices. For example, USDA
projects \9\ the 2025 marketing year average price for corn to be $3.90
per bushel, which is below the effective reference price of $4.26 per
bushel. Similarly, sorghum is projected at $3.80 per bushel, under its
reference price of $4.51 per bushel. These price forecasts are expected
to trigger and therefore increase PLC payments. ARC program payments
depend on if actual farm revenue falls below the established revenue
guarantee, which is likely given the anticipated price declines.
---------------------------------------------------------------------------
\8\ https://www.fsa.usda.gov/resources/programs/arc-plc.
\9\ https://aae.wisc.edu/pdmitchell/2025/01/17/initial-arc-and-plc-
recommendations-for-2025/.
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Conservation payments are also forecast to grow by $663 million
(15.1%), from $4.3 billion in 2024 to $5.1 billion in 2025, primarily
due to enhanced funding from the Inflation Reduction Act,\10\ which
boosted conservation programs such as the Environmental Quality
Incentives Program (EQIP) \11\ and the Conservation Stewardship Program
(CSP).\12\
---------------------------------------------------------------------------
\10\ https://www.fb.org/market-intel/whats-in-the-inflation-
reduction-act-for-agriculture.
\11\ https://www.nrcs.usda.gov/programs-initiatives/eqip-
environmental-quality-incentives.
\12\ https://www.nrcs.usda.gov/programs-initiatives/csp-
conservation-stewardship-program.
---------------------------------------------------------------------------
Despite these projections, there are numerous reports that Natural
Resources Conservation Service (NRCS) conservation project funding has
been frozen in response to the Trump Administration's Office of
Management and Budget memorandum.\14\ This has left producers with
signed contracts for conservation work uncertain about when--or if--
they will be reimbursed for conservation projects. If these delays
continue, the actual disbursement of conservation funds may fall short
of USDA's current forecast.
---------------------------------------------------------------------------
\14\ https://s3.documentcloud.org/documents/25506186/m-25-13-
temporary-pause-to-review-agency-grant-loan-and-other-financial-
assistance-programs.pdf.
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Dairy Margin Coverage (DMC) \15\ payments are projected to decrease
by $8.9 million (12%) in 2025 compared to 2024, driven by lower feed
costs that are expected to improve milk-feed margins for dairy farmers.
---------------------------------------------------------------------------
\15\ https://www.fsa.usda.gov/resources/programs/dairy-margin-
coverage-program-dmc.
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The rise in government payments for 2025 highlights the extent of
financial strain caused by recent disasters and declining commodity
prices, underscoring the role of ad hoc aid in stabilizing farm income.
A new, fully enacted farm bill \16\--rather than another extension--
could have strengthened long-term safety net programs, potentially
reducing the need for large-scale emergency appropriations.
---------------------------------------------------------------------------
\16\ https://www.fb.org/market-intel/five-things-well-miss-without-
a-new-farm-bill.
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Figure 2: Breakdown of Ad Hoc Disaster Assistance
2016-2025F
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
* Farm Bill Programs Payments Include: ARC, PLC, DMC,
Conservation and Loan Programs.
Source: USDA Economic Research Service, Farm Bureau
Calculations.
Commodity Markets: Mixed Performance Continues
Despite the strong farm income forecast, cash receipts from
commodity sales are expected to fall slightly in 2025, declining by
$1.8 billion (0.3%) from 2024's projected $516.8 billion to $515
billion. This marks the third consecutive year of lower cash receipts,
largely due to weaker crop markets and reinforcing concerns that any
farm income gains are largely government-assistance-driven rather than
market-based.
Crop Receipts: Declines Deepen for Key Commodities
Total crop receipts are forecast to fall by $5.6 billion (2.3%)
from 2024's $245.2 billion to $239.6 billion in 2025, pulled down by
declines in major row crops. Corn receipts are expected to drop by $2.7
billion (4.3%) from $63.4 billion in 2024 to $60.7 billion in 2025,
with both prices and quantities sold trending downward. Soybeans are
projected to see an even sharper decline, falling by $3.1 billion
(6.6%) from $47.4 billion in 2024 to $44.2 billion in 2025. Wheat and
hay receipts are also expected to shrink, with lower prices playing a
key role.
There are a few brighter spots, however. Vegetable and melon
receipts are projected to rise by $1.3 billion (4.6%), increasing from
$27.6 billion in 2024 to $28.9 billion in 2025, and fruit and nut
receipts are expected to see modest gains. Cotton, despite ongoing
challenges, is forecast to experience a 10.2% increase in receipts,
rising from $5.3 billion in 2024 to $5.8 billion in 2025, due to
slightly stronger demand.
Figure 3: U.S. Farm IncomeDCrop Receipts
Nov. 6 Release
Billion Dollars
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
F = Forecasted.
YOY = Year-over-year comparing 2024F to 2025F.
Source: USDA ERS, Farm Bureau Calculations.
Livestock and Dairy: Modest Gains
The outlook for livestock and dairy is more positive, with total
animal/animal product receipts forecast to rise by $3.8 billion (1.4%)
from 2024's $271.6 billion to $275.4 billion in 2025. Gains in milk,
hog and broiler prices are behind this increase, though inflation-
adjusted figures suggest a more subdued market.
Milk receipts are projected to rise by $1.4 billion (2.7%),
increasing from $50.8 billion in 2024 to $52.1 billion in 2025,
supported by stronger prices and increased production. Hog producers
are also expected to see a $1.5 billion (5.3%) boost in receipts from
$28.9 billion in 2024 to $30.4 billion in 2025. Meanwhile, broiler
receipts are forecast to climb by $1.4 billion (3%), from $44.9 billion
in 2024 to $46.3 billion in 2025, following a similar pattern of higher
prices and quantities sold.
However, not all livestock sectors will see improvements. Cattle
and calf receipts are expected to decline slightly from $108.5 billion
in 2024 to $108.3 billion in 2025 due to lower sales volumes, and egg
producers are forecast to see a $0.6 billion (2.2%) drop in receipts
from $26.3 billion in 2024 to $25.7 billion in 2025 due to weaker
pricing.
Figure 4: U.S. Farm IncomeDLivestock Receipts
Feb. 6 Release
Billion Dollars
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
F = Forecasted.
YOY = Year-over-year comparing 2024F to 2025F.
Source: USDA ERS, Farm Bureau Calculations.
Production Expenses Expected to Decline Slightly
Total farm production expenses, including operator dwelling
expenses, are forecast to decline slightly in 2025, falling by $2.5
billion (0.6%) to $450.4 billion. This marks the second consecutive
year of expense reductions, following a projected $9 billion (2.0%)
decline in 2024. However, despite these decreases, production costs
remain historically high, and certain expense categories continue to
rise.
Feed expenses--the largest single cost category--are projected to
decline by $7 billion (10.1%) to $62.4 billion in 2025, largely due to
lower grain prices. Fertilizer expenses are also expected to fall by
$3.6 billion (11.1%) to $29.2 billion, while pesticide costs are
forecast to drop by $1.2 billion (6.0%) to $18.1 billion. These
declines reflect continued adjustments in input markets following price
spikes in 2022 and 2023.
Conversely, labor costs are expected to rise by $1.8 billion (3.6%)
to a record $53.1 billion in 2025, driven by wage increases \17\ and
ongoing labor shortages.\18\ Tax \19\ and fee expenses are also
expected to reach record levels--up 5.7% ($1.01 billion) over 2024.
Interest expenses,\20\ which have climbed in recent years due to
elevated borrowing costs, are expected to decline for the first time
since 2020 but only by 0.5% ($135 million) as compared to 2024.
---------------------------------------------------------------------------
\17\ https://www.fb.org/market-intel/2025-aewr-labor-costs-
continue-to-climb.
\18\ https://www.fb.org/market-intel/critical-farm-labor-visa-use-
ticks-up.
\19\ https://www.fb.org/market-intel/2025-tax-cliff-individual-
income-provisions.
\20\ https://www.fb.org/market-intel/interest-expenses-threatening-
farm-financial-health.
---------------------------------------------------------------------------
While USDA's numbers project overall expense reductions, many
farmers are deeply concerned that potential tariffs could drive up
input costs, particularly for imported fertilizers and equipment. With
global trade policies in flux, these projections may not fully account
for rising financial pressures on farm operations.
A Cautious Recovery Amid Market Uncertainty
USDA's latest estimates for 2025 net farm income offer an early
glimpse into the farm financial outlook. While the forecast suggests a
sharp rebound, much of the projected increase is driven by government
disaster assistance rather than improvements in commodity markets. This
underscores a more complex reality--one where short-term aid is
propping up farm income rather than sustained market-driven growth.
The projected increase in farm income from 2024 to 2025 masks
continued price pressures in key crops, declining receipts for some
livestock producers, and persistent cost challenges. While disaster
assistance provides some short-term relief for previous years' losses,
the 2025 farm economy outlook, especially for field crops, remains
weak.
At the same time, the growing uncertainty surrounding trade
policies, tariffs and potential supply chain disruptions could
significantly impact both farm income and expenses in ways not
currently reflected in USDA's estimates.
As policymakers weigh critical farm bill decisions, USDA's latest
figures underscore the importance of strengthening farm safety net
programs in ways that provide predictable, long-term support rather
than creating reliance on ad hoc emergency aid. With continued market
uncertainty ahead, ensuring a stable and resilient farm economy will
require more than a single year of disaster assistance. A strong, fully
enacted farm bill could have provided the risk management tools needed
to reduce reliance on short-term aid and better position producers
against the economic volatility ahead.
Figure 5: U.S. Farm Income and Expenses
U.S. Farm Sector Cash Receipts, Expenses, and Net Farm Income
Billion Dollars
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: USDA ERS, Farm Bureau Calculations.
______
Submitted Letter by Hon. Angie Craig, a Representative in Congress from
Minnesota; on Behalf of Yahaira Caceres, Government Relations
Manager; Vanessa Garcia Polanco, Government Relations Director,
National Young Farmers Coalition
February 20, 2025
Re: Letter for the Record from National Young Farmers Coalition on
the Committee Hearing on ``Examining the Economic Crisis in
Farm Country'', February 11th 2025
Dear Chairman GT Thompson and Minority Leader Angie Craig,
The National Young Farmers Coalition (Young Farmers) thanks the
U.S. House Committee on Agriculture and the Honorable GT Thompson for
holding this hearing to discuss the financial conditions in the farm
country. The testimonies presented during the hearing underscored the
profound economic pressures and uncertainty experienced by farmers
nationwide, which directly impact their ability to secure and maintain
farmland while farming in a changing climate.
Young Farmers is committed to ensuring a just and viable
agricultural future for a new working generation. In a 2022 national
survey of our coalition, nearly three out of four respondents reported
experiencing climate impacts on their farm and 88% attributed those
changes to climate change. Our farmers have experienced increased pest
pressure, uncertainty and severe fluctuations in water supply, and
increased rates of disease, with seemingly no end in sight. Young
farmers have lost crops and sustained damage to their farms due to
extreme weather events, have had disrupted growing seasons, suffered
severe economic losses, and have shut down operations due to droughts
and unsafe conditions from uncontrolled wildfires.
Land access, retention, transition, and being able to adapt to
changing weather patterns are critical to the success of agriculture in
this country. However, access to land is the number one challenge
facing young farmers in the United States. Finding affordable land to
purchase is the top challenge for this new generation, regardless of
geography, number of years farming, or whether or not they are first-
generation farmers. With the average age of U.S. farmers approaching 60
years old and nearly \1/2\ of U.S. farmland expected to change hands
over the next 2 decades, the farm bill is our best chance at creating
real and lasting policy solutions to this daunting trend that keeps
farmland out of reach for so many. At the same time, it jeopardizes our
country's food security and threatens the vitality of our urban and
rural communities. Land that is stewarded plays a critical role in
climate change mitigation and resilience, but farmers cannot properly
steward the land if they lack secure and sustainable land tenure.
Supporting equitable access to land means addressing the climate
crisis, facilitating farm transition, investing in community-driven
initiatives, and supporting young farmers and ranchers to access
capital, find markets, and strengthen their operations. Investing in
equitable land access and conservation is an investment in the future
of agriculture.
Chairman Thompson and Minority Leader Craig highlighted the
critical role of Federal policies in supporting agricultural resilience
and economic stability, emphasizing the need for targeted investments
to bolster farm income and mitigate financial risks. Each of the four
witnesses stressed the dire consequences of rising input costs,
fluctuating commodity prices, and inadequate access to credit and land
tenure.
This system isn't working for young farmers, with 81% of young
farmers surveyed \1\ * affirming that the cost of production on their
farm is greater than the prices they receive for their products, which
presents at least a little bit of a challenge. Young farmers are driven
by a variety of ambitions and guiding beliefs and are implementing an
array of different operational models--with varying relationships to
profitability and various definitions of viability and financial
success. Current business and market-related policies should evolve to
clearly recognize and include the diversity of farming operations this
new generation is modeling.
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\1\ https://www.youngfarmers.org/wp-content/uploads/2022/08/
NationalSurveyReport20
22.pdf
* Editor's note: the report referenced, Building a Future With
Farmers 2022: Results and Recommendations from the National Young
Farmer Survey, is retained in Committee file.
---------------------------------------------------------------------------
This means changing policy to build on existing production,
processing, distribution, and marketing infrastructures with a focus on
local and regional foodsheds; expanding metrics of success to consider
community health and quality of life in addition to job creation and
farm revenue; improving programmatic supports around economic- and
climate-related losses and reinforcing protections against potential
abuses and economic harm.
As the Committee considers the issues with financial conditions in
farm country, we urge legislators to center the needs and challenges of
young farmers and take into account the following policy proposals:
Increasing Land Access, Security, and Opportunities Act
(H.R. 3955) would provide essential funding for programs aimed
at expanding access to affordable farmland for young farmers.
This bipartisan legislation represents a pivotal opportunity to
enact policy solutions that promote equitable land distribution
and support the next generation of agricultural stewards.
Fair Credit for Farmers Act (H.R. 5296): As farm bill
negotiations progress, this new legislation could rebalance the
relationship between farmers and FSA to one of equal partners
seeking farm success. With stronger protections and credit
terms that recognize the unique challenges of farming, the Act
will create long-term payoffs that strengthen rural communities
across America.
The Farmers First Act (H.R. 6379) would reauthorize the Farm
and Ranch Stress Assistance Network (FRSAN) and ensure rural
communities have access to certified community behavioral
health clinics, critical access hospitals, and rural health
centers.
The Small Farm Conservation Act (H.R. 8488) would young
farmers and farmers of color through dedicated funding and a
simplified application process for small operations.
The Farmer-to-Farmer Education Act (H.R. 5354) aims to
provide a way to overcome many adoption barriers by having
someone with firsthand experience share both the benefits and
challenges of practice adoption, addressing the perceived risks
to yield, labor costs, and product quality that can prevent
farmers from trying a new practice.
In conclusion, we urge the Committee to prioritize legislative
measures that enhance access to credit, access to affordable land,
support farmers in conservation and sustainable land stewardship,
regulate speculative agricultural investments, and expand farmers'
mental health support services. By addressing these critical issues in
the upcoming farm bill, we can empower farmers to thrive economically
and sustainably steward our nation's agricultural resources.
We hope that you invite a young farmer to testify as you deliberate
on policies impacting the next generation of American agriculture. We
look forward to collaborating with you to advance the interests of our
farming communities.
Sincerely,
Yahaira Caceres,
Government Relations Manager,
National Young Farmers Coalition;
Vanessa Garcia Polanco,
Government Relations Director,
National Young Farmers Coalition.
______
Submitted Letter by Hon. Alma S. Adams, a Representative in Congress
from North Carolina
February 6, 2025
Hon. Alma S. Adams,
Washington, D.C.
Dear Representative Adams,
I'm writing today to express appreciation for the U.S. Department
of Agriculture (USDA) investment into programs like the Local Food
Purchasing Agreement (LFPA) and the Local Food Promotion Program
(LFPP). My name is Erin Bradley and I'm writing today on behalf of food
hubs and farmers from across North Carolina. As Cofounder of Freshlist,
a Charlotte-based food hub, I have spent the past 7 years building a
financially resilient business model that strengthens our regional food
economy. We work with nearly 200 small and beginning farmers across the
Carolinas and have helped inject more than $10 million into local
agriculture. We're just a part of a system of local food leaders that
spans throughout the state impacting farmers from Murphy to Wilmington
Over the last 2 weeks, despite having signed and executed contracts
with USDA, food hubs across the state of North Carolina have been
locked out of receiving disbursements through LFPA and LFPP. These
programs operate on a reimbursement basis, meaning food hubs like ours
must cover the costs of purchases up-front, relying on scheduled
disbursements to maintain cash flow. The sudden halt in funding has
created immediate financial uncertainty--not just for us as food hubs,
but for the farmers we support and the customers who depend on us. The
complete lack of communication from USDA on this matter has also been
incredibly frustrating as groups worry about paying their staff and
farmers and paying for equipment and other infrastructure that was
required to fulfill their grant activities.
These programs have been instrumental in expanding market access
for farmers, reducing food waste, and keeping food dollars in our
communities. Beyond the financial mechanics, these programs play a
vital role in ensuring stability and growth for small farms. They allow
us to commit to crop purchases before planting, provide reliable market
access, and respond quickly to crises. For example, during Hurricane
Helene, we helped farmers who lost access to their usual markets by
selling their products until their supply chains recovered. Without
these programs--and the reimbursements that sustain them--our ability
to provide this critical support is severely weakened.
As one example, North Carolina's Local Food Purchase Agreement
program has been a resounding success for the small farmers and
residents of North Carolina.
253 farmers participated in this program over the year and a
half that it was running in the state.
18 Food hubs packed 92,671 prepacked food boxes for
distribution by 138 community-based distribution partners.
1,033,654 pounds of food were purchased at prices set by
participating farmers.
94% of farmers surveyed stated that participating in the
program was worth their extra time and effort.
A $2.8 million investment by the USDA has netted $9.04
million in economic impact across North Carolina.
USDA grant programs are critical for supporting the regional food
economy, and delays like this undermine the trust and planning that
farmers, food hubs, and nonprofits rely on to succeed. I urge you to
advocate for an immediate resolution to this issue and ensure that
reforms to Federal food programs are implemented thoughtfully--without
causing harm to those who rely on them. This has been one of the most
efficient and effective public-private partnerships in North Carolina
agriculture in years for helping smaller and beginning farmers. It has
allowed farmers to purchase additional equipment, hire more staff, and
have reliable markets that fit their scale and abilities. We ask for
your support in ensuring that the USDA honors its contractual
obligations to farmers, food hubs, and states.
Thank you for your time and for your leadership on behalf of North
Carolina's farmers and food hubs.
Sincerely,
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Erin Bradley,
Cofounder, Freshlist LLC.
______
Submitted Advisory Notice by Hon. James P. McGovern, a Representative
in Congress from Massachusetts
[https://oig.usaid.gov/sites/default/files/2025-02/USAID OIG_Oversight
of USAID-Funded Humanitarian Assistance Programming 021025.pdf]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Oversight of USAID-Funded Humanitarian Assistance Programming Impacted
by Staffing Reductions and Pause on Foreign Assistance
February 10, 2025
Advisory Notice
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
USAID pallets with emergency food bars for Syrian refugees.
Courtesy World Food Programme, 2013.
This alert is intended to raise risk-related concerns related
to USAID-funded humanitarian assistance and is based on
information provided by USAID staff, implementers, government
officials, and prior OIG oversight work. In producing this
alert, we followed Quality Standards as required by the Council
of the Inspectors General on Integrity and Efficiency.
Introduction
The United States Agency for International Development Office of
Inspector General a (USAID OIG), through its investigations
and audits, conducts independent oversight of USAID's programs and
personnel. Our oversight b work c includes
reviews of the Agency's controls over its humanitarian assistance
funding. For example, in July 2024, we published a report d
identifying shortcomings and vulnerabilities in USAID's oversight
mechanisms to prevent diversion of aid to U.S.-designated terrorist
organizations in Gaza. Similarly, in late January 2025, we issued a
memorandum e highlighting challenges and potential ``fixes''
to ensure enhanced accountability of foreign assistance funding,
including humanitarian assistance programs funded by USAID but
implemented by United Nations agencies.
---------------------------------------------------------------------------
\a\ https://oig.usaid.gov/.
\b\ https://oig.usaid.gov/sites/default/files/2024-12/USAID-OIG-
SARC-Fall-2024-FINAL.pdf.
\c\ https://oig.usaid.gov/node/7277.
\d\ https://oig.usaid.gov/sites/default/files/2024-08/
USAID%20OIG%20Advisory%20on%20
Gaza%20Oversight%207-25-2024.pdf.
\e\ https://oig.usaid.gov/sites/default/files/2025-01/
USAID%20Inspector%20General%20
Memorandum%20Challenges%20to%20Accountability%20and%20Transparency%20Wit
hin%20
USAID-Funded%20Programs.pdf.
---------------------------------------------------------------------------
In this alert, we identify risks and challenges to the safeguarding
and distribution of USAID's $8.2 billion in obligated but undisbursed
humanitarian assistance funds following (1) the Department of State's
pause on foreign assistance programs and (2) subsequent personnel
actions by USAID that have substantially reduced the operational
capacity of its Bureau of Humanitarian Assistance (BHA).
Background
On January 24, 2025, the Secretary of State ordered a pause in all
new obligations of foreign assistance funding pending an 85 day review
of United States foreign assistance programs.\1\ The Secretary
additionally ordered contracting and grant officers to issue stop-work
orders for all existing foreign assistance awards.\2\ As such, all
USAID programs were suspended, including those with funds already
obligated and disbursed.\3\
---------------------------------------------------------------------------
\1\ 25 STATE 6828. The Secretary of State issued this order
consistent with the President's Executive Order (https://
www.whitehouse.gov/presidential-actions/2025/01/reevaluating-and-
realigning-united-states-foreign-aid/) on Reevaluating and Realigning
United States Foreign Aid.
\2\ 25 STATE 6828.
\3\ Pre-existing programs falling under a waiver were eligible for
payments; however, USAID staff and implementers state that the
uncertainty and lack of communication surrounding the scope of the
waivers has caused payment delays and decisions by aid organizations to
suspend work.
---------------------------------------------------------------------------
The Secretary's January 24 order contained an initial waiver for
``emergency food assistance.'' Four days later, the Secretary issued a
waiver for disbursements under existing ``lifesaving humanitarian
assistance'' programs, defined as ``life-saving medicine, medical
services, food, shelter, and subsistence assistance, as well as
supplies and reasonable administrative costs as necessary.'' USAID
guidance on implementation of the pause and subsequent waivers also
included a directive for staff to refrain from external communications
outside of ``communications necessary to implement the pause.'' \4\
Moreover, Agency officials' plans to place more than 90 percent of the
USAID workforce on paid administrative leave effective February 9 were
paused for at least a week by a court order issued on February 7.\5\
---------------------------------------------------------------------------
\4\ ``Clarification on Implementing the President's Executive Order
on Reevaluating and Realigning United States Foreign Aid,'' FAQs from
Acting Administrator Jason Gray, USAID, January 26, 2025.
\5\ ``Update on the Path Forward,'' Office of the Administrator,
USAID, February 8, 2025.
---------------------------------------------------------------------------
Personnel Actions Reduce the Operational Capacity of USAID Staff
Responsible for Humanitarian Assistance Programs
USAID employs approximately 10,000 staff, with approximately \2/3\
posted at the Agency's more than 60 missions overseas.\6\ BHA is the
Agency bureau responsible for providing humanitarian assistance--
including food, water, shelter, emergency healthcare, sanitation and
hygiene, and critical nutrition services. According to BHA, prior to
the personnel actions over the past 2 weeks, the bureau employed
approximately 1,089 staff: 741 U.S. Direct Hires and Personal Services
Contractors (197 posted overseas with the remaining 544 posted in
Washington, DC), and 348 Institutional Support Contractors who, while
employed by private contractors, essentially function like regular
staff.
---------------------------------------------------------------------------
\6\ Congressional Research Service, ``U.S. Agency for International
Development: An Overview,'' January 6, 2025. USAID FY 2022 Agency
Financial Report,
---------------------------------------------------------------------------
On February 4, 2025, USAID notified its entire workforce that they
would be placed on paid administrative leave beginning February 8 with
limited exceptions. At the same time, BHA staff began reporting sudden
loss of access to USAID email and information technology (IT) systems.
On February 7, based on disabled user account information, BHA
leadership identified approximately 535 Direct Hires and Personal
Service Contractors who had been placed on administrative leave but
expected the number of sidelined staff to increase to just over 600
later that day. Hundreds of BHA's Institutional Support Contractors
were furloughed the week before by their private employer.
Collectively, executed and planned personnel actions would remove,
temporarily or permanently, approximately 90 percent of BHA's worldwide
workforce.
Existing waivers issued by the Department of State account for
lifesaving humanitarian assistance programming should allow the flow of
what BHA identifies as $8.2 billion in undisbursed obligations.
However, BHA staff reductions, together with a lack of clarity about
the scope of the humanitarian assistance waivers and the extent of
permissible communications between BHA staff and its implementers, has
significantly impacted USAID's capacity to disburse and safeguard its
humanitarian assistance programming. Specifically, USAID's existing
oversight controls--albeit with previously identified shortcomings
\7\--are now largely nonoperational given these recent directives and
personnel actions. Moreover, the February 7 court order that paused
additional staff reductions \8\ does not obviate, at this time,
concerns regarding the capacity of BHA staff to work with implementing
partners to protect and distribute humanitarian assistance commodities
and conduct vital oversight of taxpayer-funded programs.
---------------------------------------------------------------------------
\7\ USAID OIG, ``Assessment of USAID's Oversight Policies to
Prevent the Diversion of Assistance to Hamas and Other Terrorist
Organizations, (https://oig.usaid.gov/node/6981)'' July 25, 2024. USAID
OIG, ``Memorandum: Challenges to Accountability and Transparency Within
USAID-Funded Programs, (https://oig.usaid.gov/node/7399)'' January 28,
2025.
\8\ American Foreign Service Association v. Donald Trump, Civil
Action No. 1:25-cv-352 (D.D.C. February 7, 2025) (granting temporary
restraining order (https://storage.courtlistener.com/recap/
gov.uscourts.dcd.277213/gov.uscourts.dcd.277213.15.0_1.pdf)).
---------------------------------------------------------------------------
Disruptions to the Delivery of Humanitarian Aid Place U.S.-Funded
Commodities at Risk of Diversion and Spoilage
While initial guidance following the pause in foreign assistance
funding provided a waiver for emergency food assistance, shipments of
in-kind food assistance have been delayed around the world. USAID-
funded implementers face conflicting instructions, and USAID staff
express concerns about potentially circumventing the restrictions on
external communications by providing clarifying guidance. According to
USAID staff, this uncertainty put more than $489 million of food
assistance at ports, in transit, and in warehouses at risk of spoilage,
unanticipated storage needs, and diversion. As a routine matter, USAID
pre-positions emergency food aid in BHA warehouses around the world,
including approximately 29,000 metric tons in Houston, Texas, valued at
nearly $39 million, more than 40,000 metric tons in a warehouse in
Djibouti in East Africa valued at $40 million, and over 10,000 metric
tons in a South African warehouse valued at $10 million. All BHA
warehouses have pre-positioned emergency food aid commodities supplied
by U.S. manufacturers and American farmers, as required by law.
Moreover, USAID staff identified over 500,000 additional metric
tons of food currently at sea or ready to be shipped. The food is
sourced from American farmers pursuant to Title II Food for Peace (the
longest standing permanent program for international in-kind food aid,
administered by USAID) and Commodity Credit Corporation (CCC) funding.
Because this funding source was not included under the Secretary's
emergency food assistance waiver,\9\ these commodities were held in
limbo, subjecting them to spoilage, unanticipated storage needs, and
potential diversion.
---------------------------------------------------------------------------
\9\ Reports indicate that food assistance under Title II programs
has recently resumed. See U.S. Department of Agriculture, ``USDA Global
Food Security Programs Continue (https://www.usda.gov/about-usda/news/
press-releases/2025/02/07/usda-global-food-security-programs-
continue)'' (press release), February 7, 2025; Senator Jerry Moran's
post on X, (https://x.com/JerryMoran/status/
1888333729225158957?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp
%7Ctwgr%5Etweet&mx=2) February 8, 2025; World Food Programme post on X,
(https://x.com/WFP/status/1888583840697884860) February 9, 2025.
---------------------------------------------------------------------------
Recent Directives Have Curtailed USAID's Ability to Vet Humanitarian
Assistance Awards for Potential Terrorist Ties and Monitor Aid
Deliveries in High-Risk Environments
The pause in funding and reductions in staff, including over 90
percent of BHA's workforce furloughed or placed on administrative
leave, has undermined two key oversight mechanisms to ensure
accountability over humanitarian assistance funding: partner vetting
and third-party monitoring.
Partner Vetting
USAID describes partner vetting as a risk-mitigation tool to
``ensure that American taxpayer funds do not benefit terrorists and
their supporters.'' Currently, partner vetting is required for
programming in Afghanistan, Iraq, Lebanon, Pakistan, Syria, West Bank/
Gaza, and Yemen where designated terrorist organizations such as Hamas,
Hezbollah, ISIS, and Ansar Allah (also known as the Houthis) operate.
Before the Agency awards a contract, grant, or cooperative agreement in
these locations, the proposed awardee must submit to USAID data needed
to vet the organization and its key personnel. The same vetting must be
undertaken before an aid organization issues a subaward. While USAID
OIG has previously identified gaps in the scope of partner vetting,\10\
USAID staff have reported that the counter-terrorism vetting unit
supporting humanitarian assistance programming has in recent days been
told not to report to work (because staff have been furloughed or
placed on administrative leave) and thus cannot conduct any partner
vetting. This gap leaves USAID susceptible to inadvertently funding
entities or salaries of individuals associated with U.S.-designated
terrorist organizations.
---------------------------------------------------------------------------
\10\ In July 2024, USAID OIG issued an advisory (https://
oig.usaid.gov/sites/default/files/2024-08/
USAID%20OIG%20Advisory%20on%20Gaza%20Oversight%207-25-2024.pdf) that
identified the lack of vetting of UN agencies as a major vulnerability
in USAID's partner vetting program.
---------------------------------------------------------------------------
Third-Party Monitors
Third-party monitoring \11\ (TPM) is a mechanism USAID utilizes for
oversight of humanitarian assistance programs, particularly in
dangerous locations where its staff cannot safely travel. Site visits
conducted by USAID-contracted TPMs help USAID verify if the delivery of
physical goods align with self-reporting by aid organizations. TPM
field monitors conduct simple, standardized surveys and interviews with
recipients to check if USAID programming was delivered as intended. The
January 24 pause on foreign assistance programming suspended all TPM
contracts and activities, including in high-risk environments such as
Ukraine, Afghanistan, Ethiopia, Haiti, Gaza, Iraq, Lebanon, Somalia,
Syria, and Venezuela, impacting another layer of oversight over U.S.
taxpayer-provided aid.
---------------------------------------------------------------------------
\11\ TPM includes the systematic collection of performance
monitoring data by a contractor that has not been directly involved in
the activity being monitored, either as a prime or subawardee.
---------------------------------------------------------------------------
Staff Reductions Have Constrained USAID's Ability to Receive and
Respond to Allegations of Misconduct Involving Humanitarian
Assistance Programming
The Secretary of State granted waivers for emergency food
assistance and lifesaving humanitarian assistance. However,
uncertainties about the scope of the waivers, the degree of permissible
communication between USAID staff and aid organizations, the sudden
dismissal of contract staff, and the placement of staff on paid
administrative leave has limited BHA's ability to receive and respond
to allegations of fraud, waste, abuse, or diversion of humanitarian
aid.
As noted in our July 2024 advisory,f USAID relies on aid
organizations to self-report allegations of misconduct, consistent with
their mandatory award obligations. Such mandatory reporting--
particularly in nonpermissive environments such as Gaza and Ukraine
where USAID's ability to travel to program sites is limited--enables
USAID to take remedial measures to modify or in some cases terminate
programming experiencing unacceptable losses. For example, in 2023 a
USAID-funded nongovernmental organization (NGO) reported to USAID that
food intended for families in the al-Hol displaced persons camp in
northeast Syria had been diverted by the Asayish (Internal Security
Forces of North and East Syria) and al-Hol camp administration to
themselves. In response to this disclosure, USAID disallowed the
relevant costs submitted by the NGO and undertook additional remedial
measures to protect programming in Syria.
---------------------------------------------------------------------------
\f\ https://oig.usaid.gov/sites/default/files/2024-08/
USAID%20OIG%20Advisory%20on%20
Gaza%20Oversight%207-25-2024.pdf.
---------------------------------------------------------------------------
Further, USAID OIG has previously reported g that USAID-
funded commodities, supplies, and equipment in high-risk environments
are susceptible to diversion to terrorist organizations, such as Hamas.
Over the past 2 weeks, staffing shortages and limitations on
communications with aid organizations stemming from the cessation of
U.S. foreign assistance have limited USAID's ability to receive, react
to, and report allegations of diversion, all of which impacts the
Agency's mandatory reporting obligations to Congress.\12\ Additionally,
according to BHA staff, the placement of most of its staff on
administrative leave is preventing the bureau from responding to USAID
OIG audit requests, reports of investigative findings, and other
routine OIG oversight inquiries.
---------------------------------------------------------------------------
\g\ https://oig.usaid.gov/sites/default/files/2023-11/
Situational%20Alert%20-%20Diversion%20
and%20Material%20Support_0.pdf.
\12\ Section 7015(j), P.L. 118-47, Further Consolidated
Appropriations Act, 2024: ``The Secretary of State and USAID
Administrator, as applicable, shall promptly inform the appropriate
Congressional committees of each instance in which funds appropriated
by this Act for assistance have been diverted or destroyed, to include
the type and amount of assistance, a description of the incident and
parties involved, and an explanation of the response of the Department
of State or USAID, as appropriate.''
---------------------------------------------------------------------------
Conclusion
USAID OIG's independent oversight of USAID's humanitarian
assistance programs over the years has identified significant
challenges h and offered recommendations to improve Agency
programming to prevent fraud, waste, and abuse. Our longstanding
concerns about existing USAID oversight mechanisms persist.i
However, recent widespread staffing reductions across the Agency,
particularly within BHA, coupled with uncertainty about the scope of
foreign assistance waivers and permissible communications with
implementers, has degraded USAID's ability to distribute and safeguard
taxpayer-funded humanitarian assistance.
---------------------------------------------------------------------------
\h\ https://oig.usaid.gov/sites/default/files/2024-12/TMC_FY_2025-
FINAL.pdf.
\i\ https://oig.usaid.gov/sites/default/files/2025-01/
USAID%20Inspector%20General%20Memo
randum%20Challenges%20to%20Accountability%20and%20Transparency%20Within%
20USAID-
Funded%20Programs.pdf.
---------------------------------------------------------------------------
For more information on USAID OIG's work or to report allegations
of fraud, waste, corruption, and abuse, please visit our website at
oig.usaid.gov.
______
Submitted Letter by Hon. Jill N. Tokuda, a Representative in Congress
from Hawaii
February 10, 2025
Charles Ezell,
Acting Director,
U.S. Office of Personnel Management,
Washington, D.C.
Dear Mr. Ezell:
We write to request further information on the impacts of the U.S.
Office of Personnel Management's (OPM) ``deferred resignation'' offer
and to express grave concerns with those impacts on essential
government services across the nation.
Recent reports have suggested that tens of thousands of Federal
employees have opted in and accepted the ``deferred resignation.'' This
blanket approach to the Federal personnel policy could have major
negative impacts on critical government services and functions, leaving
agencies unable to fulfill their responsibilities as charged by
Congress. Depending on which Federal employees choose to accept the
offer and how OPM and respective agencies administer this policy, this
approach risks creating severe disparities and gaps in Federal services
and functions across the country.
To better understand the potential impacts to essential government
functions across the country, we request responses to the following
questions by no later than the close of business on Wednesday, February
19, 2025:
1. What is the total number of Federal employees who accepted the
offer?
a. Such tabulation should include, at minimum, the number of
resignations
by agency, subagency or department, GS level, average
length of service,
the number of employees hired through Schedule A and
Veterans Pref-
erence, state or territory, and Congressional district.
2. Of the individuals who accepted the offer, how many also decided
to retire?
a. Such tabulation should include, at minimum, the number of
resignations
by agency, subagency or department, GS level, average
length of service,
the number of employees hired through Schedule A and
Veterans Pref-
erence, state or territory, and Congressional district.
In addition, we request a copy of the final contract signed by all
employees who accepted the ``deferred resignation'' offer to better
understand their benefits and rights.
We remain deeply concerned by the Administration's ongoing attacks
on Federal employees who serve our communities across the country. It
has sown unnecessary panic and fear among not just the Federal
workforce but also our constituents who depend on Federal services for
their basic needs.
Thank you for your consideration.
Sincerely,
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Hon. Jill N. Tokuda, Hon. Steny H. Hoyer,
Member of Congress Member of Congress
Hon. Alexandria Ocasio-Cortez, Hon. Haley M. Stevens,
Member of Congress Member of Congress
Hon. Rashida Tlaib, Hon. Alma S. Adams,
Member of Congress Member of Congress
Hon. Timothy M. Kennedy, Hon. Andre Carson,
Member of Congress Member of Congress
Hon. Emanuel Cleaver, Hon. Henry C. ``Hank'' Johnson,
Jr.,
Member of Congress Member of Congress
Hon. Nikki Budzinski, Hon. Chrissy Houlahan,
Member of Congress Member of Congress
Hon. Val T. Hoyle, Hon. Cleo Fields,
Member of Congress Member of Congress
Hon. Jimmy Panetta, Hon. Greg Landsman,
Member of Congress Member of Congress
Hon. Nikema Williams, Hon. Mark Pocan,
Member of Congress Member of Congress
Hon. Becca Balint, Hon. Andrea Salinas,
Member of Congress Member of Congress
Hon. Teresa Leger Fernandez, Hon. Steven Horsford,
Member of Congress Member of Congress
Hon. Scott H. Peters, Hon. Brittany Pettersen,
Member of Congress Member of Congress
Hon. Joaquin Castro, Hon. Dina Titus,
Member of Congress Member of Congress
Hon. Ilhan Omar, Hon. LaMonica McIver,
Member of Congress Member of Congress
Hon. Sydney Kamlager-Dove, Hon. Juan Vargas,
Member of Congress Member of Congress
Hon. Jennifer L. McClellan, Hon. Ed Case,
Member of Congress Member of Congress
Hon. Delia C. Ramirez, Hon. Adam Smith,
Member of Congress Member of Congress
Hon. Hillary J. Scholten, Hon. Suzan K. DelBene,
Member of Congress Member of Congress
Hon. Ro Khanna, Hon. Robert J. Menendez,
Member of Congress Member of Congress
Hon. Seth Magaziner, Hon. Suzanne Bonamici,
Member of Congress Member of Congress
Hon. Glenn Ivey, Hon. Bennie G. Thompson,
Member of Congress Member of Congress
Hon. Eleanor Holmes Norton, Hon. Nanette Diaz Barragan,
Member of Congress Member of Congress
Hon. Raul M. Grijalva, Hon. Shri Thanedar,
Member of Congress Member of Congress
Hon. Mary Gay Scanlon, Hon. Summer L. Lee,
Member of Congress Member of Congress
Hon. Judy Chu, Hon. Pramila Jayapal,
Member of Congress Member of Congress
______
Submitted Article by Hon. Eugene Simon Vindman, a Representative in
Congress from Virginia
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[https://www.washingtonpost.com/nation/2025/02/10/farmers-agriculture-
funding-frozen/]
Farmers on the hook for millions after Trump freezes USDA funds
The White House had repeatedly said the funding freeze would
not affect benefits that go directly to individuals.
February 10, 2025
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
A farmer prepares equipment for planting corn in Hull, Iowa,
in 2011. (Melina Mara/The Washington Post)
By Daniel Wu,\1\ Gaya Gupta \2\ and Anumita Kaur \3\
---------------------------------------------------------------------------
\1\ https://www.washingtonpost.com/people/daniel-wu/.
\2\ https://www.washingtonpost.com/people/gaya-gupta/.
\3\ https://www.washingtonpost.com/people/anumita-kaur/.
Farmers report missing millions of dollars of funding they were
promised by the U.S. Department of Agriculture, despite promises from
the Trump Administration that a Federal funding freeze would not apply
to projects directly benefiting individuals.
On his first day in office, President Donald Trump ordered \4\ the
USDA to freeze funds for several programs designated by President Joe
Biden's signature clean-energy and health-care law, the 2022 Inflation
Reduction Act.\5\ The freeze paused some funding for the department's
Environmental Quality Incentives Program, which helps farmers address
natural resource concerns, and the Rural Energy for America Program,
which provides financial assistance for farmers to improve their
infrastructure.
---------------------------------------------------------------------------
\4\ https://www.whitehouse.gov/presidential-actions/2025/01/
unleashing-american-energy/.
\5\ https://www.washingtonpost.com/politics/2022/08/16/biden-
inflation-reduction-act-signing/.
---------------------------------------------------------------------------
Farmers who signed contracts with the USDA under those programs
paid up front to build fencing, plant new crops and install renewable
energy systems with guarantees that the Federal Government would issue
grants and loan guarantees to cover at least part of their costs. Now,
with that money frozen, they're on the hook.
Laura Beth Resnick, who runs a Maryland flower farm, said she
signed a contract for the USDA to cover half of a $72,900 solar panel
installation. In late January, she said, she was told her reimbursement
payment was rejected because of Trump's executive order.
``I really don't know what we would do,'' Resnick said. ``It just
feels like I can't even really think about it.''
The USDA has also halted funding for other programs, including
scientific research grants in agriculture and producing climate-smart
crops, according to a letter \6\ sent to the agency Thursday from House
Democrats on the Agriculture and Appropriations committees.
---------------------------------------------------------------------------
\6\ https://pingree.house.gov/uploadedfiles/
2025.02.06_letter_to_usda_re_frozen_federal_funds.
pdf.
---------------------------------------------------------------------------
``Pulling the rug out from these recipients runs counter to the
mission of the USDA and will quickly and significantly cripple economic
development in rural America,'' the letter says.
The White House repeatedly \7\ said \8\ the freeze of agriculture
funding and other Federal financial assistance would not affect
benefits that go directly to individuals, such as farmers. The
Administration rescinded the pause \9\ after a Federal judge
temporarily halted its implementation.
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\7\ https://www.washingtonpost.com/business/2025/01/29/white-house-
budget-office-spending-freeze/.
\8\ https://www.washingtonpost.com/business/2025/01/28/trump-
freeze-federal-grants-loans/.
\9\ https://www.washingtonpost.com/business/2025/01/29/white-house-
budget-office-spending-freeze/.
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But over the weekend, farmers reported that their funding remained
frozen--another blow to farmers who are also facing threats of tariffs
and freezes to foreign-aid spending that involved food purchased from
American producers.
In a statement, a USDA spokesperson said the Trump Administration
``rightfully has asked for a comprehensive review of all contracts,
work, and personnel across all Federal agencies.''
``Anything that violates the President's Executive Orders will be
subject for review,'' the statement said. ``The Department of
Agriculture will be happy to provide a response to interested parties
once Brooke Rollins \10\ is confirmed [as secretary of agriculture] and
has the opportunity to analyze these reviews.''
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\10\ https://www.washingtonpost.com/politics/2024/11/23/
agriculture-secretary-trump-usda/.
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The White House did not respond to a request for comment.
The disruption to funds appropriated through the Inflation
Reduction Act takes aim at one of Biden's flagship legislative
accomplishments. Most of that funding was doled out in the last month
of his presidency, according to \11\ a Washington Post analysis. But
grants worth $32 billion authorized under the act remain vulnerable to
being frozen.
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\11\ https://www.washingtonpost.com/climate-environment/2025/02/08/
trump-climate-federal-funding-freeze/.
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The USDA made $3.1 billion from the Inflation Reduction Act
available in the 2024 fiscal year for climate-smart agriculture
activities, according \12\ to the department, including grants and
loans for initiatives such as the Environmental Quality Incentives
Program and the Rural Energy for America Program.
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\12\ https://www.nrcs.usda.gov/sites/default/files/2024-12/NRCS and
the Inflation Reduction Act Fiscal Year 2024.pdf.
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On Wednesday, National Farmers Union President Rob Larew testified
before the Senate Agriculture Committee that the Trump Administration's
sweeping decisions on Federal funding were creating concern for farmers
across the country.
``No one knows what funding will be available or if key programs
will have the staff needed to operate,'' Larew said.\13\ ``Freezing
spending and making sweeping decisions without Congressional oversight
just adds more uncertainty to an already tough farm economy.''
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\13\ https://www.c-span.org/program/senate-committee/agriculture-
industry-leaders-testify-on-state-of-agriculture-economy-part-1/655370.
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Skylar Holden, a cattle farmer in eastern Missouri, said he signed
a $240,000 contract in December under the Environmental Quality
Incentives Program to share costs on investments for his farm.
With the funding, Holden erected new fencing and installed a well.
He had planned further improvements to his farm's water system and
spent $80,000 on materials and labor contracts that he expected would
be partly paid back by the government.
This month, a USDA representative told him the funding was paused
because of Trump's executive order.
``I asked her, `Is there any word on when they're going to be
unfrozen?' '' Holden said. `` `Is it going to be frozen indefinitely?'
She didn't have any answers for me.''
The department suggested that Holden's only recourse was to contact
his Congressional representatives, he said.
With the money promised in his contract on hold, Holden said he's
in a bind. Up-front payments for the construction and materials he
arranged for are due soon, on top of his regular operating expenses.
The terms of his contract also stipulate that he must pay back the
money he has already received from the department, plus interest, if he
does not complete all the development outlined in the contract within 5
years. If the freeze continues, he said, he will have to take out
additional loans or sell his farm equipment and cattle.
``If I sell them out to make this payment, I'm hurting myself years
down the line,'' Holden said. ``I'm robbing myself of the future.''
Resnick, the flower farmer in Maryland, received a grant from the
Rural Energy for America Program last year, she said. The initiative
provides\14\ loan financing and grant funding to agricultural producers
and rural small businesses to make energy efficiency improvements.
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\14\ https://www.rd.usda.gov/programs-services/energy-programs/
rural-energy-america-program-renewable-energy-systems-energy-
efficiency-improvement-guaranteed-loans#..
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The grant was slated for solar panel installation on Resnick's
farm--an improvement she said would save her farm $5,000 a year and be
better for the environment. Now, with the contract seemingly suspended,
Resnick doesn't know what to do.
``We don't have a whole lot of capital to hire a lawyer,'' she
said.
The funding freezes have also paused large projects across states.
The Iowa Soybean Association said\15\ Thursday that USDA payments had
been suspended for a 5 year Midwest Climate-Smart Commodity grant that
the organization secured in 2022. The $95 million deal supports more
than 1,000 farms in 12 Midwestern states and encourages conservation
practices in producing corn, soybeans, wheat and sugar beets, the
association said.
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\15\ https://www.iasoybeans.com/newsroom/article/farmer-led-
efforts-impacted-by-pause-in-climate-smart-commodity-program.
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Hundreds of participating farmers are owed $11 million after
investing in new farming practices and crops because of the program,
the association said.
Resnick said she's at a loss for what to do next with the
government's promised payment of around $36,000 on hold. She is already
paying back a loan she took out to launch her farm. Taking out another
one would be unimaginable.
``It scares me for the future of farming,'' Resnick said. ``Not
just that funding won't be available for new farmers that need it, but
that farmers won't trust the government going forward.''
______
Submitted Questions
Question Submitted by Hon. John W. Rose, a Representative in Congress
from Tennessee
Response from Ryan Talley, Partner, Talley Farms; on behalf of
Specialty Crop Farm Bill Alliance
Question. Mr. Talley, as the Trump-Vance Administration works to
combat unfair and undermining trade practices across our foreign
markets, what would American fruit and vegetable producers like to see
as we work to level the playing field and ensure fair competition,
particularly against Mexico?
Answer. Specialty crop growers confront challenges in export
markets abroad as well as competition from low-cost imports here at
home. The cost of production in the United States is significantly
higher than it is for many of our foreign competitors, particularly
with respect to labor and regulatory compliance. Labor is the single
greatest input cost for most specialty crop growers, and the seasonable
and perishable nature of many American-grown specialty crops further
complicates this competitive landscape.
For the wellbeing of all Americans, it is critically important that
specialty crops imported into the United States must comply with
stringent U.S. safety standards to avoid outbreaks that can disrupt
markets and jeopardize the health and wellbeing of American consumers.
The Foreign Agricultural Service (FAS), in conjunction with the
Agricultural Trade Advisory Committee (ATAC) for Fruits and Vegetables,
works day-in and day-out to defend U.S. producers by ensuring we have
fair access to foreign markets. Along with programs such as Technical
Assistance for Specialty Crops (TASC) and the Market Access Program
(MAP), USDA and FAS provide vital resources to support our domestic
industry's efforts to access foreign markets.
One of the most significant steps this Congress could take to
enhance the competitiveness of America's specialty crop growers is to
enact a new 5 year farm bill that includes the suite of tools the
Specialty Crop Farm Bill Alliance is proposing that invest in the long-
term vitality of our domestic industry.
Question Submitted by Hon. Nikki Budzinski, a Representative in
Congress from Illinois
Response from Rodney M. Weinzierl, Owner, Weinzierl Farms; Executive
Director, Illinois Corn Growers Association; Executive
Director, Illinois Corn Marketing Board
Question. Regardless of geography, and whether they grew up on a
farm, finding secure access to high-quality land is the greatest
barrier faced by young and aspiring farmers and is the number one
reason farmers are leaving agriculture. Land ownership is particularly
important because it has a cumulative effect on farm viability. It
enables farmers to leverage land to access capital and credit needed to
invest in and operate their farms and provides the security needed to
make long-term investments in infrastructure, irrigation, and soil. How
would improving access to land, capital, and credit benefit the greater
agricultural economy?
Answer. We are approaching a cliff of extensive land transition but
have limited sustainable pathways to ensure the next generation of
American Farmers have the needed financial resources and programs to be
competitive. I have personally seen the shortfalls of the existing
programs as our farm has begun transitioning to my oldest daughter.
USDA's research shows that 86 percent of total farms fall into the
category of ``small farm'' based on annual gross farm income. This
research also confirms that the total income for households in that
category includes off-farm contributions of nearly 50 percent.\1\ * My
daughter also falls into this category of being actively involved in
farming but relying on a full-time off-farm job to not only meet the
needs of the farm but her personal household expenditures. I believe
reform of existing beginning farmer programs offered by the Farm
Service Agency (FSA) is needed but that alone is not enough. When we
think about the next generation of farmer, many have been working at an
off-farm job for a decade or more as they work to establish the needed
liquidity and cash flow to successfully obtain access to agricultural
land. Many have also taken advantage of traditional retirement
offerings through those employers. I propose a new Beginning Farmer
Retirement Rollover program that would allow a beginning farmer to
withdrawal funds from a traditional retirement account without the 10%
early withdrawal penalty to purchase farmland if they will be the
primary operator, assuming at least 51% of the production risk. This
would give beginning farmers more autonomy and competitiveness to act
in a timely manner when a potential land opportunity presents itself.
This ``rollover'' concept supports the fact that the majority of
farmers view their land as their retirement, and this would help a
beginning farmer not only be competitive to acquire land but transfer a
liquid form of retirement to a more permanent long-term asset. I also
support current efforts that help facilitate the transition to
practices that reduce risk and increase in-field resiliency. Many
times, these conservation practices require cost prohibitive up-front
costs with returns seen multiple years in the future. My own farm
experience as well as research conducted by the University of Illinois
and University of Missouri \2\ support that the long-term use of
practices like cover crops and no-till, lower risk by building soil
health and permeability, leading to more resilience when extreme
weather events like drought and excess rainfall occur. Helping the next
generation of family farmer acquire land is the first step, giving them
the support to manage that land with practices that increase long-term
competitiveness and productivity is the next. By strengthening the
programs supporting beginning [farmers], we are not only supporting
food and national security, but we are also supporting the viability of
rural communities. These beginning farmers live and raise their
families in the communities where they farm which infuses more economic
stability into those communities ensuring they remain viable for future
generations.
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\1\ https://www.ers.usda.gov/data-products/chart-gallery/chart-
detail?chartId=58426.
* Editor's note: references annotated with are retained in
Committee file.
\2\ https://foodandagpolicy.org/homepage/focus-areas/agriculture-
data/conservation-and-crop-insurance-research-pilot/.
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[all]