Drought, supply chain shortages and the rising cost of doing business have led to a tough 2022 for U.S. farmers, but 2023 could be even worse, a fourth-generation dairy farmer said.
“I really think we have a threat to food security,” Tennessee farmer and agriculture advocate Stephanie Nash told Fox News. “I think 2023 is going to be tough. Worse than this year.”
Food prices have outpaced headline inflation in 2022, with November food prices having 10.6% increase compared to last year, when headline inflation hit 7.1%, according to the Bureau of Labor Statistics.
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A number of factors have contributed to the rise in food prices, including fertilizer and fuel shortages, extreme weather conditions and rising interest rates in an industry that depends on debt financing, said Nash.
“2022 has been a really tough year,” said the 29-year-old. “I think there will definitely be a lot of shortages next year.”
We’re going to have a supply chain shortage, we’re going to have an increase in our supply [prices] at the grocery store,” she added. “I don’t think it’s going to go down anytime soon, and I think Americans are going to really suffer in their pocketbooks.“
Most American farmers take out short-term, variable-rate loans each year to pay for everything from seeds and fertilizers to livestock and machinery, according to the Ministry of Agriculture. As a result, the Federal Reserve aggressive interest rate increases from as low as 0% to as high as 4.25% has increased the cost of farming operations.
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“You have family farmers and ranchers who can’t pay their bills,” Nash said. “You talk about loans – that’s a big deal.
“Food costs are going up, the overall production of our farm is going up,” she added. “We need to be able to get paid more to make it happen.”
The agricultural sector total interest expense is expected to reach nearly $26.5 billion this year, nearly 32% more than last year, according to USDA data. Due to more fertilizer, fuel and land costsfarmers must decide whether to cut back on crops and livestock or endure as they struggle to repay larger loans, according to two dozen farmers and bankers interviewed by Reuters.
“We’re seeing grocery products going up, and I think a lot of people don’t understand that,” Nash said. We are not the ones pushing to increase, we are earning less than ever.
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One of the country’s worst droughts in decades is also helping to fuel food inflation. As of Tuesday, 53.2% of the lower 48 states are in drought, according to the US Drought Watch.
“I think it’s a big threat to the United States: weather, drought, and water,” Nash told Fox News. “We haven’t really started any new programs to help devastated farmers across America.”
Severe drought and wildfires have prompted farmers across the country to reduce crops and the size of livestock.
((AP Photo/Noah Berger))
“There are many great programs that try to help farmers when they get sick or die in the family, but the government is not really capitalizing on the devastation,” she added.
Nearly three-quarters of farmers saw reduced crop yields due to drought, according to the American Farm Bureau Federation 2021. survey of american food producers.
Similarly, two-thirds of breeders and breeders said sale of animals, with average herd size expected to fall by 36%, according to the survey. The largest herd declines are occurring in Texas (down 50%), New Mexico (43%) and Oregon (41%), showing the wide geographic spread of distress.
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“Look at Texas, how big it is in the beef industry,” Nash said. “It’s a really sad situation to be in that farmers have to sell their livestock so aggressively.”
She said independent farmers needed extra support to stay afloat.
“We need to be able to get paid more to succeed and stay in the family farming and ranching community,” Nash told Fox News.
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