Farmers Report Grim Economic Outlook

An overwhelming majority of corn growers from across the United States say that the nation's farm economy is possibly already in a crisis or on the brink of one, according to a new survey released today by the National Corn Growers Association.

The findings were released during an NCGA-sponsored economic roundtable in Washington where experts stressed the seriousness of the economic problems facing farmers.

During the discussion, NCGA leaders said Congress could alleviate some of the pain by passing the Nationwide Consumer and Fuel Retailer Choice Act of 2025, which would remove an outdated provision in the Clean Air Act that restricts the summertime sales of fuel with 15% ethanol blends, often referred to as E15.

"Farmers are in a lot of economic pain right now" said Illinois farmer and NCGA President Kenneth Hartman Jr. "It's a four-alarm fire in the countryside, and we need members of Congress to act fast to remove barriers to markets. Passing legislation for the year-round, nationwide sale of higher blends of ethanol would be an important first step in addressing this problem."

In the survey of 1,034 farmers conducted by Farm Journal from Aug. 28 to Sept. 10, nearly half (46%) indicated that they believe the United States is on the brink of a farm crisis. A total of 80% of those surveyed indicated they believe the farm economy may be or 'is' on the brink of a farm crisis. And 65% said that they are more concerned about their farm financials now than they were a year ago.

In what could be a troubling sign for the larger economy, those surveyed indicated that the top changes they were considering making next year would be holding off on equipment purchases, reducing fertilizer applications and looking for options to increase off-farm income.

"These findings point to a once-in a generation problem for the agricultural economy," said NCGA Chief Economist Krista Swanson. "The survey findings suggest that this crisis could have a long reach, affecting every area of the economy, as farmers are less likely to make purchases and will certainly make budget cuts that could affect their local communities."

The findings come as farmers face the largest three-year decline in net cash receipts in history because of declining crop farm profitability associated with lower prices and elevated input costs. On top of that, the Department of Agriculture is projecting record crops this year. Despite demand forecast at a record level, it still trails production, and any reduction could further drive down corn prices.

During the roundtable discussion, experts noted that the difficulty of accessing affordable loans could further complicate matters for farmers looking for a life raft.

"In the current environment, interest rates are more expensive, and the rate curve is steeper," said Dr. John Newton, an economist and executive head of Terrain Ag, an offering of leading Farm Credit associations. "As a result, there is less flexibility for lenders on payment terms, and efforts to assist distressed borrowers may not ultimately lower their cost structure."

Newton echoed Hartman's call for increasing markets for farmers, noting that increasing the use of homegrown biofuels is one way to accomplish that goal.

A study released this week by the National Corn Growers Association, showed that, at full adoption, providing consistent access to E15 year-round would provide an additional $25.8 billion to U.S. gross domestic product, boost incomes by $10.3 billion, support 128,000 additional full-time jobs and provide a home for some excess corn crops at full adoption.

Corn growers are visiting Capitol Hill this week to highlight their economic concerns and to call for action on the E15 legislation.