House Committee on Agriculture members agree that passing a new farm bill is crucial this year as farmers face falling commodity prices and rising input expenses. However, a firm timeline on passing an updated bill is uncertain as the current legislation is set to expire in two months.
The House Ag Committee passed the farm bill in May by a 33-21 vote. The bill still needs to pass through the full House of Representatives and Senate before being sent to a conference committee. Failing to pass a farm bill could lead to another extension of the current version of the farm bill, which was first passed in 2018 and expires on Sept. 30.
Farmers face “a perfect storm” early in 2025 and will have trouble securing the necessary cash flow for loans without an updated farm bill, said Dana Allen-Tully, president of the Minnesota Corn Growers Association.
Testifying earlier this month during a three-hour House Ag Committee hearing, Allen-Tulley predicted producers will struggle to have operating loans approved and need to negotiate land contracts with landowners if Congress fails to pass the bill. Allen-Tully, who supports the House-passed farm bill, predicted supplemental legislation could be necessary to address production and economic losses.
The lack of a new farm bill comes as severe weather has weakened crop conditions in the Midwest. Record rainfall in Minnesota and the Dakotas has combined with falling commodity prices. John Deere’s recent layoff of 610 production workers is evidence of the downturn in the ag economy, noted Rep. Austin Scott (R-Ga.).
The U.S. Department of Agriculture projects a $43 billion or 27 percent drop in farm income following a 19 percent fall from 2022-23. Corn farmers face an average loss of $150 per acre if prices remain as is, Allen-Tully said. Farm debt is expected to reach a record high by the end of the year, and commodity prices have fallen 12-15 percent in just the last few months. “Farm and ranch families need help,” she said.
Rep. Tracey Mann (R-Kan.) called for the passage of a “comprehensive” five-year farm bill that protects and strengthens crop insurance. Rising input expenses along with falling commodity prices and profit margins risk plunging the agriculture industry into crisis, said House Committee on Agriculture Chair Glenn Thompson (R-Pa.). He called on the Senate Agriculture Committee to release its text of the farm bill before House-Senate negotiations continue.
Thompson criticized Congressional Democrats for adding billions of dollars to climate programs without improving the farm safety net. Still, Thompson said he is open to renegotiating the farm bill with Democrats who want the farm bill to pass this year.
Commodity prices have not kept up with high input and credit costs over the past few years, noted Rep. David Scott (D-Ga.). “It is clear that we need to come together on a farm bill that strengthens the farm safety net and we are going to do it together,” he noted.
Both the Independent Community Bankers of America and American Bankers Association support passing a farm bill with increased loan limits and a faster approval process for USDA-guaranteed loans. Last year, the ABA recommended that the lending limits for farm ownership loans guaranteed by the FSA be increased to at least $3 million from its current mark of $1.75 million. The ABA also supports raising the cap on FSA-guaranteed farm operating loans to at least $2.5 million from $1.75 million to keep pace with the rising costs of inputs.
ABA Ag and Rural Bankers Committee Chair Tony Hotchkiss called for reference prices, which have historically been set once in the farm bill, to instead be set annually and to not be contingent on commodity prices to prevent from getting out of correlation with production costs.
Rep. Jasmine Crockett (D-Texas) said a farm bill passed under a potential Trump administration would be detrimental to the ag economy. She described a proposal under the controversal Project 2025 framework that would cut government crop insurance subsidies and end a program which manages domestic sugar production to maintain high prices.
Committee members were also divided on the impact tariffs instituted during the Trump administration and mostly maintained under President Joe Biden have had on the ag sector. Scott said American farmers would be hard hit yet again if Republicans pursued a retaliatory trade war. Allen-Tully noted the country faces a $32 billion trade deficit and called on Congress to prioritize domestic biofuels.
Rep. Austin Scott supported Trump’s approach to the trade deficit. “If you want free trade, it is going to be fair trade,” he said. Rep. Mary Miller (R-Ill.) criticized what she sees as the Biden administration’s inability to negotiate new trade agreements. Biden’s energy policies could threaten family farms, she added.
