This post originally appeared on the National Farmers Union blog and was written by Zack Clark, NFU Govt. Relations Representative.
Last week, two major reports were released that further cemented what we already know – oversupply in the marketplace is driving commodity prices further and further downward, and after three years of declining prices, real estate values and credit conditions are beginning to deteriorate.
The glut of commodities highlighted by last week’s World Agricultural Supply and Demand Estimates Report (WASDE), which forecasted another increase in corn, soy, wheat, sorghum, barley, and oats, has the potential to continue prolonged periods of depressed prices. Continued overproduction has been failing to match actual demand, driving up supplies and straining storage capacity. Across the countryside, grain is being stored on the ground.
Equally alarming is the release of the Federal Reserve Bank of Kansas City’s second quarter assessment of agricultural credit conditions. Soon after the release of the bank’s first quarter report, NFU President Roger Johnson testified to Congress about the deteriorating credit conditions. As the second quarter report highlights, the situation continues to decline. It found that farm income has continued to fall, there is increased demand for loan renewals and short-term operating loans, and there are declines in repayment rates and falling farmland values.
Over the past year, National Farmers Union (NFU) has ramped up efforts to highlight the declines in the countryside to members of Congress in Washington, D.C. NFU has also long advocated for a strong safety net that reacts to the exact situation we find ourselves in today. Members of Congress, who are currently back home for the August congressional recess, need to hear about these problems from their constituents.
Congress will only be in session for four weeks between now and the election. Yet during September, while they are in Washington, they will need to pass legislation to fund the government. Farmers Union members need to let their congressional delegations know that these spending packages need to contain assistance to combat the deteriorating agricultural economy. Congress should:
~ Increase funding for the USDA’s farm loan programs,
~ Provide emergency assistance for producers in need, and
~ Work with the USDA to provide short-term remedies for low commodity prices.
In addition, Congress needs to immediately begin working on the next Farm Bill to provide a stronger safety net that protects family farmers and ranchers from very low prices. This safety net needs to be written to focus on the needs of our nation’s producers during tough times, not written to fit a certain price tag.
The NFU annual legislative fly-in will provide opportunities for NFU members to come to the nation’s capital to press members of Congress on these important issues and advocate on behalf of the nation’s family farmers and ranchers. A heavy focus of our members’ meetings with their representatives will be the depressed farm economy, and there are concrete asks that NFU is putting forward to help aid family farmers and ranchers through these tough times. We must not miss any opportunities to highlight the growing crisis in the rural economy to members of Congress, especially when its going on in their backyard.