By Madi Clark / For The Herald
Farmers across the nation are unlikely to have taken a check to the bank at the end of this year’s harvest; at least not checks big enough to cover their debt payments. The government’s so-called remedies are a lesson in contradiction.
As statistics refute themselves, regulations harm more than protect, and trade barriers exasperate challenges facing domestic producers, the government’s role in farming is only adding to the red.
Government data ineptly grasps the financial condition facing farmers. On one hand, the U.S. Department of Agriculture predicts farm income will increase by 21.65 percent for 2025. But at the same time, direct government payments are expected to increase by 354 percent!
The government is confused by its own statistics and tactics. Despite improved net farm income, federal direct farm support is increasing while the number of farms are dwindling. In all but Idaho, the mountain states exceed the national loss of 8.5 percent of farms between 2016 and 2024. Data clearly indicates that the numbers and/or tactics are overdrawn.
The only clarification comes for Midwestern farmers. According to the Federal Reserve Bank of Kansas City, Midwestern farm lending activity expanded in 2024, with volume of new loans increasing 40 percent year-over-year. The story hadn’t brightened in the first quarter of 2025, with weakening agricultural credit conditions, while demand for farm loans continued to grow.
Unfortunately for Western farmers, the Federal Reserve of San Francisco only delivers a one-paragraph qualitative summary alluding to the assumptions of industry contacts. But local voices reiterate that the situation isn’t any better for the mountain states.
“It was a really bad year last year,” said Fred Burmester, an Idaho hay farmer. “The commodity prices dropped a lot for us. … And our production costs were close to the same.” Regarding an operating loan Burmester took out at 9.2 percent interest, he said, “It’s going to take years to pay that back.”
State regulations also add to this financial difficulty for the mountain state region. In 2022, Washington state experienced a 40 percent increase in farm-related expenses, thanks to the removal of the agriculture overtime exemption; 29.8 percent of these costs were attributed to an escalation in labor expenses, which had increased by 52 percent year-over-year. Another major contributor (10 percent) was expenses attributed to “marketing, storage and transportation” due to the state’s carbon tax.
Tariffs exploit another vulnerability of the mountain states because of our reliance on imported agricultural inputs (like fertilizer) and the global retaliation toward American products. Washingotn, Idaho, Montana and Wyoming ship their agricultural products across the world, and these markets are not easily reclaimed.
The second Trump administration’s renewed trade war bounced the check on America’s farm resilience. These recent trade disputes revealed long-existing weaknesses in the agricultural economy. Long-term consolidation and anti-competitive trends among agricultural input suppliers have steadily pinched the agricultural economy. In the face of tighter supply chains and global trade wars, the vulnerability of a low-competition system is now apparent.
When 70 percent of each market space is controlled by two or three suppliers, the companies have less economic incentive to be responsive to one farmer’s needs. A recent Senate Judiciary Committee Hearing even listened to testimony on these trends. “America’s farmers are the most productive in the world,” said the panel’s chair, Sen. Chuck Grassley, R-Iowa. “They take the risk, put in the work and feed the United States and much of the world. But they also operate on thin profit margins.”
These thin profit margins are quickly giving way to overdrawn farm accounts, despite the USDA’s estimates that the average net farm income was above $80,000 in 2024. For anyone involved in agriculture in the last five years, very few “average” farmers deposited such sums in their bank accounts. Nor is a recovery expected for 2025, with a record corn harvest overflowing silos, thus continuing the price decline.
Yet, the government’s efforts for recovery are more like a teenager with a credit card, rather than a responsible party paying down the debt. Poor data collection outside of Midwestern farms, increases in state regulations, disregard for anti-competitive behavior, and resumed trade disputes all continue to hurt farm margins.
We need policies that improve resiliency and decrease farmer vulnerability to government choices.
Madi Clark is a senior policy analyst for the Mountain States Policy Center, an independent research organization based in Idaho, Montana, Eastern Washington and Wyoming, mountainstatespolicy.org.
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