House Ag committee hears concerns from YBS farmers over loans and production costs

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House Ag committee hears concerns from YBS farmers over loans and production costs

An Illinois farmer says USDA loan programs for young people, beginners and small farmers should be more flexible to help offset the cost of producing a crop.

At a House Agriculture Committee hearing on Thursday, Adam Brown told lawmakers that a lack of capital had weighed on his bottom line at a time when input costs were skyrocketing. “Government programs certainly cannot compensate for all the cash flow problems a farmer may face. Tight margins over the past few years have forced us to find ways to tighten our budget to make ends meet, including the liquidation of non-essential farm equipment.

Agricultural economist Nathan Kauffman of the Kansas City Federal Reserve says he expects agricultural lending to increase over the next few years. “Capital expenditures are expected to decline in the coming months for the first time since 2020. Many contacts pointed to sharp increases in costs associated with fertilizers, fuel and labor as key drivers of higher expenses and a less favorable outlook for the industry.”

Kauffman says a sudden drop in commodity prices could further squeeze profit margins and reduce overall capital.

Brown and Kauffman testified at a hearing on a review of The Farm Bill: The State of Credit for Young, Beginning and Underserved Farmers.

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