As the expiration date of the current farm legislation looms closer, the agricultural community faces mounting uncertainty about the prospects of a new farm bill. According to the latest Ag Economists' Monthly Monitor, a majority of surveyed ag economists express skepticism about the likelihood of a farm bill being written by the deadline of September 30, 2023. However, a glimmer of hope remains, as a few experts believe that it could still materialize by January 1, 2024.
Both the House and Senate are actively engaged in holding Congressional hearings and listening sessions to shape a new five-year bill. Nevertheless, the time constraint prompts Congress to explore alternative paths, testing the waters this week by proposing amendments to the fiscal 2024 agriculture appropriations bill. This could potentially lead to test votes on farm bill matters, with debate on the measure likely to begin next week.
One of the primary areas of debate revolves around determining the available funding for the new farm bill. Additionally, there are discussions on how the current administration's climate goals and priorities could influence the 2023 farm bill. A report by University of Maryland professor Erik Lichtenberg suggests that the USDA could play a significant role in combating climate change by reorienting its largest land stewardship programs, including the Conservation Reserve, the Environmental Quality Incentives Program (EQIP), and the Conservation Stewardship Program (CSP). However, such reorientation is deemed risky as it may impact the support for these programs.
A notable challenge arises from the fact that Congress has decided not to allocate additional funding for the farm bill this year. As a result, lawmakers are getting creative in finding ways to secure funding. Senate Ag Chair Debbie Stabenow has mentioned the possibility of reallocating nearly $20 billion from her party's climate and tax credit law, enacted last year, to address general spending in the upcoming farm bill.
The context surrounding the 2023 farm bill debate differs significantly from that of the 2018 farm bill, enacted during a time when commodity prices were low, and production costs were less burdensome. Presently, high production costs stand as the biggest headwind for farmers, with economists projecting potential financial challenges for the agriculture sector in the coming months. Differing opinions exist among experts regarding the extent of financial pressure producers will face, as well as the outlook for U.S. crop production and commodity/feed prices.
To gain insights into these critical issues, the Ag Economists' Monthly Monitor conducts surveys among nearly 50 agricultural economists from various regions and sectors. The first of its kind, this joint effort between the University of Missouri and Farm Journal allows economists to express their economic and production forecasts anonymously, encouraging more open dialogue. The university conducts the survey and analyzes the data, while Farm Journal disseminates the results.
As the deadline for the farm bill approaches, the agriculture industry keeps a watchful eye on Congress's deliberations and awaits the outcomes of the ongoing debates. While uncertainties prevail, the hope remains that lawmakers will find a viable path forward to address the challenges faced by the agricultural community through a new and comprehensive farm bill. More insights from the June Ag Economists' Monthly Monitor will be released later this week, shedding further light on the prevailing economic landscape and expectations for the future of the farming sector.