Economic Pulse: As losses deepen, action needed to help stabilize the ag economy

Crop farmers continue to face elevated production costs, lower commodity prices and tight margins — with no relief on the horizon.

Multiple years of high input costs, declining crop prices, trade uncertainty, global energy volatility and negative margins have weakened farm balance sheets and reduced working capital.

Without additional support, more farmers will face difficult decisions about whether they can continue operating into the next crop year.

Congress and the administration have already taken important steps to respond to these economic headwinds.

In late 2024, lawmakers passed the American Relief Act, which included $10 billion in aid for row crop farmers through the Emergency Commodity Assistance Program to address economic losses from the 2023 and 2024 crop years.

The Farmer Bridge Assistance Program provided $11 billion in short-term economic relief to row crop farmers, while the U.S. Department of Agriculture initially reserved another $1 billion for specialty crop and sugar assistance for losses felt in 2025.

USDA later finalized $1.625 billion specifically for eligible fruit, vegetable and tree nut growers through the Assistance for Specialty Crop Farmers Program, an increase from the amount originally set aside, with sugar assistance addressed separately.

Combined, these programs provided more than $23 billion in economic assistance. But some sectors of agriculture are projected to face yet another consecutive year of losses, leaving cumulative shortfalls that remain well beyond the support provided to date.

An analysis by the American Farm Bureau Federation projects 2027 will mark a sixth year of negative returns over total costs for most major row crops. Specialty crop farmers are experiencing similar financial strain.

At the same time, fertilizer and fuel prices remain volatile, with the Iran conflict adding additional pressure to those markets.

Corn losses are projected by AFBF to increase from $131 per acre this year to $167 per acre next year, with soybean losses projected to increase from $80 per acre to $138 per acre and wheat losses projected to increase from $114 per acre to $145 per acre.

In total dollar terms, corn accounts for the largest projected loss at $15.8 billion, followed by soybeans at $11.6 billion and wheat at $6.6 billion.

Near-term economic assistance is needed to help farm families offset trade-related losses and increased input costs intensified by geopolitical conflict.

Longer-term policy solutions are also needed to strengthen the farm economy beyond immediate assistance.

Swift implementation of farm bill improvements, protecting interstate commerce from a patchwork of state laws, stronger risk management tools including better data collection and publication to support more effective options for specialty crop producers, and domestic market-expanding policies can help improve demand, provide certainty and reduce the risk of further farm closures.

Together, short-term assistance and long-term policy solutions will help protect rural communities and ensure farmers can continue producing the food, fuel and fiber Americans rely on.

Farm aid fate still uncertain

The House moved to head-off a potential shutdown before this fall’s critical midterm elections by advancing a bill to fund the federal government through Dec. 4.

The measure passed by just two votes. Approval in the Senate will likely be a challenge.

Included in the $95 billion budget reconciliation package is $12 billion in additional agricultural assistance.

The 216-to-214 vote on July 21 sends the stopgap, known as a continuing ​resolution, to the ​Senate, where Republican leaders are ‌exploring ⁠their own short-term funding bill in negotiations with Democrats.

Without action by ​Congress, ​funding ⁠for most federal agency programs will ​expire at midnight ​on ⁠Sept. 30, the end of the current ⁠fiscal ​year.

The new funding would add to $12 billion in aid the administration has already disbursed to farmers this year, as the industry sags under high ​production costs and low crop prices, made worse by trade policies and the war with Iran.

House Agriculture Committee Chairman Glenn “GT” Thompson said the additional assistance is necessary as many farmers continue dealing with significant economic challenges.

“American producers are currently staring down the barrel of $80 billion in uncovered farm losses since 2023,” the Pennsylvania Republican said. “That’s even with the commodity program payments and the bridge assistance program that President Trump initiated last fall.”

Also still lingering on the legislative docket is the farm bill — which was enacted in 2018 and has since been extended three times, with the current extension set to expire at the end of September — as well as year-round E15 and help for farmers dealing with catastrophic natural disasters like the wildfires in California and the freeze in Florida.

James Henry is the executive editor of Illinois AgriNews and Indiana AgriNews.