A group of economists is warning that the U.S. farm sector faces a prolonged slump due to the impacts of climate change and weakening global demand for agriculture products such as wheat and corn.
%Farmers across America enjoyed record profits in 2022 but have struggled over the past two years, a situation that is likely to continue, according to a group of economists that presented their outlook at a conference sponsored by the Agricultural Business Council of Kansas City.
The economists added that Congress likely needs to pass new legislation to support America’s ailing farm sector as it struggles with low crop yields and waning global demand.
Speaking at the same conference, U.S. Department of Agriculture (USDA) Chief Economist Seth Meyer agreed with the assessment of America’s farm sector, saying that agriculture is grappling with a “cost/price squeeze.”
This summer, the USDA estimated that net farm incomes in America would likely reach $140 billion U.S. this year, down nearly 25% from $182 billion U.S. in 2022.
At the same time, a recent report from the University of Missouri forecasts that net farm incomes will likely remain around $140 billion U.S. per year through 2029.
Revenue from crops this year is forecast by the USDA to decline 10% from 2023 levels, led by a downturn in corn and soybeans.
U.S. farmers previously received tens of billions of dollars in relief payments during the Covid-19 pandemic. However, those funds have now been largely exhausted.
Many farmers have reported efforts to lower their costs this year, including selling equipment and buying less fertilizer and pesticides.
Meanwhile, new legislation aimed at providing financial relief to American farmers continues to be debated in Congress.