Farm Net Incomes are Down Under President Trump After Soaring under President Obama
Farm incomes are down and farmer’s debt to asset ratios are increasing. https://www.agriculture.com/news/business/farm-income-below-70-billion-a-new-average-for-us-agriculture The overall problem for US agricultural incomes is global over-production. This has cut US farmer’s net incomes by about 50% since 2013. The Trump Administration’s policies on trade and immigration are further hurting farmer’s bottom lines.
The American farmer is the most productive in the world; the US is the world’s top agricultural producer, and about 20% of US production is for overseas imports. https://www.fca.gov/template-fca/download/MajorUSAgriculturalExportMarkets.pdf Our biggest export markets are China, Canada and Mexico – the very same markets in which President Trump has started trade wars and in which US agricultural trade has prospered over the past twenty-five years. https://www.stlouisfed.org/on-the-economy/2018/april/evolution-american-agricultural-exports Trump’s trade wars are not helping US farmer’s net incomes (i.e. profit).
The impacts on farmer’s net incomes are highly variable by state; the Midwest (with lots of corn, wheat and soybean production) has been hard hit. In Iowa for example, net farm incomes were $5 billion in 2008, $8 billion in 2013 and $3.4 billion in 2017. https://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics/charts-and-maps-about-your-state/ In next-door Nebraska, net farm incomes were $3.4 billion in 2008, $7.4 billion in 2013 and $2.7 billion in 2017. In our own state of California (with lots of grape, almond and dairy products), net farm incomes were $9.4 billion in 2008, $17.2 billion in 2013 and $17.8 billion in 2017; we are doing well. In Texas (with lots of cattle and cotton), net farm incomes were $2.8 billion in 2008, $5.5 billion in 2013 and $4.5 billion in 2017. Texas farmers lead the nation in federal agricultural subsidies ($937 million), compared to $138 million for California farmers. https://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics/charts-and-maps-of-us-farm-income-statement-data/
President Trump’s immigration policies are also hurting farm incomes by driving away Mexican farmworkers, critical to planting and harvesting crops. In states like California, Washington and Florida, labor costs are a very high component of farmer’s expenses. https://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics/charts-and-maps-about-your-state/ The Trump Administration’s attacks on Mexican migrant labor are hurting local agriculture.
American agriculture is successful due to our fertile lands, our location in the temperate zone, the investments of American farmers, the backbreaking toil of many immigrants, and the strong financial supports offered by the federal government dating back to FDR. Our next President will need far better policies on trade, immigration, farm subsidies and climate change to benefit the American farmer.
Prepared by: Lucien Wulsin