No surprise, the farm industry is highly dependent on government interference in price and risk. Just like oil and gas, auto manufacturing and most other industries. Instead of getting a twisted tax treatment for exploration, research , or a government funded coupon to buy your product (looking at you electric vehicles), farm supports are easy to look at in the form of CRP and other farm payments and crop insurance supports.
Most still have a romantic image of the America farmer, portrayed frequently with straw hats, overalls, checkered shirts, and open station tractors built immediately after world war 2 as well as an obligatory straw bale and two story barn in the background. That is clearly not what modern ag farm operators generally look like in style or function. They are , however, not a unified voice like other industries and as a result, get balkanized and have enough in fighting that they fail to perform like other parts of the American economy. Admittedly, my favorite bumper sticker remains “Support Beef…. Run over Chicken”.
Add this eroding power in the walls of DC together with the playbook adopted by those in charge of the federal government in 2025 going forward. That playbook calls for the reduction and or elimination of CRP and other ag and crop insurance payment supports. It also appears to frown on low interest loans from the government for farm land market place entry assistance . This line would lead to CRP lands being returned to production in a time of clear overproduction (which may reduce the number of wildlife harvested by hunter and vehicle) and reduce pollinators needed for production ag. As to crop insurance, the alternative is to create uncertainty with ad hoc farm disaster program payments that were common before the advent of crop insurance. The return of margin ground to the production cycle would likely increase soil loss and potential erosion and chemical issues as those acres are still subject to tax and mortgage payments and to produce something. I do wonder how many hunters, farmers and ranchers pulled the lever thinking about CRP and land idling payment policy and the impact on their avocation, hobby, lifestyle. Its not a surprise,
Currently CRP covers 25 million acres and payouts about $2 Billion annually. A lions share of those payments are in Iowa. The enrollment rate is at is lowest since 1985 already with prior years high crop prices and low CRP payment rate inducing the removal of some acres. CRP is already under pressure with the lapse of some farm bill provisions (but recall the farm bill never really dies it just goes back to a set of 1949 bench marks that are Mel Brooks level unhinged from reality) making new sign up impossible currently.
The solution to low prices is suggested to be tariffs and trade protectionism, which was last experimented with in the 2016-2020 era. That taught the Chinese consumer of ag products that Brazil was a better partner. So we used an ad hoc program called the Market Facilitation Program which paid out 23 Billion dollars to farm operators (with the top 10 percent of farm operators getting 58% of that payout). Those dollars pushed rents and equipment prices up and shoved inefficient operators out of the market.
If the goal is to get rid of small niche operators, part timers and non “Big Time Operators” the path forward is looking pretty good. Hollywood may have to adjust their set dressing and wardrobe yet again.
