News

Ag Economy: record high, Farm GDP: record low

The U.S. ag industry, overall, is contributing more to U.S. Gross Domestic Product than ever recorded, but the farm sector is not seeing the benefits.

American Farm Bureau Federation’s John Newton tells Brownfield farm GDP is less than one percent, the lowest since reporting began in 2007.

“While agricultural GDP is over $1 trillion and is record high, the farm share is at it’s lowest level, really highlighting the challenges in the farm economy.”

He says combination of factors are behind the decline rather than one commodity or production region.  “Unfortunately, what we’ve seen today is not just one low price dip and then a rebound, it’s more like a death by a thousand cuts.”  At the same time, farm bankruptcies are up more than 100 percent.  “Many expect farm bankruptcies to continue to increase throughout the rest of 2018, especially if commodity prices continue to get hurt by some of the trade rhetoric.”

Newton believes ag labor can cause the greatest boost to the farm economy or detriment.  “With so many farmers depending on labor, if we don’t have the help that we need at 3 a.m. to milk the cows or the help we need during harvest—that’s going to devastate the U.S. farm economy.”

He says U.S. farmers also need progress on trade agreements and the certainty of a farm bill.

Fifteen state Farm Bureaus are in Michigan this week, including Indiana, Illinois, Missouri, Nebraska and Iowa, to discuss pressing commodity issues and policy.

AUDIO: Press interview with John Newton