Moving past reliance on ad hoc payments
The Chief Economist for the American Farm Bureau Federation says the level of ad hoc support farmers have had to rely on is not sustainable.
John Newton says black swan events like the trade war, COVID-19 and natural disasters have forced farmers to rely on government assistance.
“We’ve had $33 billion in ad hoc support to the agricultural sector since 2018. That does not include CFAP2, that does not include WHIP or WHIP+, and that does not include any of the loans that could potentially be forgiven under the Paycheck Protection Program.”
Newton says 36% of net farm income has come from ad hoc payments like the Market Facilitation Program and the first round of the Coronavirus Food Assistance Program.
“One of the things we are starting to talk with our membership about is where do we go from here and how do we get back to getting our money from the marketplace.”
Cash receipts, or money that comes directly from the market, for crop and livestock sales are the lowest since 2010. Newton says those are concerning statistics when thinking about where to go from here.
Newton was a virtual speaker during the 2020 AgriPulse Ag Outlook Forum in Kansas City.