Farm Bill Impact Series
Floor Speech
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Mr. MANN. Mr. Speaker, I rise today to deliver the twelfth installment of my Farm Bill Impact Series: The Second State of Agriculture.
We are at the end of the second quarter, and one of the biggest issues facing agriculture across the board is the cost of things. Farmers, ranchers, and agricultural producers are laboring under the skyrocketing input costs while they work hard to keep our country fed, fueled, and clothed. They deserve workable solutions to this inflation crisis before the situation gets any worse.
The U.S. farm economy crashed in the early to mid-1980s due in part to surging inflation. From 2000 to 2020, the average annual rate of inflation was 2.1 percent, which economists consider a normal rate of inflation that helps drive overall economic growth. Last year, prices increased 7 percent overall throughout 2021, which was the largest December-to-December percentage change since 1981.
Inflation is a matter of life and death for the American farm. We saw it in the early 1980s, and now we are seeing it again. Farmers, ranchers, and agricultural producers are feeling the effects of inflation more acutely than almost anyone else in America.
In agriculture, commodity prices generally rise during periods of inflation, but input costs rise as well. Data collected by USDA shows that over the past three decades, on average, the input costs for U.S. farmers, ranchers, and agricultural producers tend to increase more than the rate of inflation and more than the prices that they receive for their products. To make matters worse, USDA estimates that input costs will continue to rise at least 5 to 6 percent throughout 2022.
In the last 12 months, feed, supplies, and repairs are all up 13 percent while ag chemicals, building materials, and machinery are all up 21 percent.
Most shockingly, just during the last 12 months, fuel is up 115 percent, natural gas is up 202 percent, and fertilizer is up 220 percent.
Think about that. This year it is costing farmers more than double what it cost last year to farm their land.
The farm bill contains relief safety net programs like crop insurance and livestock indemnity, but these programs don't account for the rising costs of fuel, fertilizer, pesticides, and seed. Agriculture is a business, and business owners can't afford to lose money year after year, which is happening now thanks to skyrocketing inflation. We need to get this situation under control.
A Kansas wheat grower recently said to me:
``Fertilizer is one of the largest expenses on any commercial farming operation. My farm has already used more than 450 tons of fertilizer for this cropping season, which includes nearly 350,000 pounds of UAN, specifically. Even though we cut back on how much we use because of the increased price, it will still cost our farm almost $70,000 more than last year. Looking forward, we will undoubtedly have to cut back on fertilizer again until prices begin to come down.''
Fertilizer cost is a major problem, but the rising cost of everything else is only compounding the issue further. For instance, if you are a Kansas rancher looking to replace all the fence on your farm with 4- barb, Red Brand wire, last year you would have been quoted $10,000 per mile. This year, quotes are coming in at around $20,000 a mile, so it has doubled. Think about that.
From fertilizer to fuel to equipment to fencing, inflation is crushing producers across this country. How can small business owners keep up with this? How can we expect the people who bear the responsibility of feeding, fueling, and clothing the world to shoulder that burden while going broke from doing so?
The people who make sacrifices so that we can eat can't afford to buy gas to drive their kids to school right now. They can't afford to pay their mortgages. American farmers are perfectly capable of producing plentiful, healthy affordable food, but no matter how much they grow and sell, inflation is killing their margins and they are going out of business.
How does the Biden administration respond to this crisis? Well, the President's budget proposal dismantles the stepped-up basis and imposes new capital gains taxes like the farm killer tax on small businesses held in families for 90 years or more. These proposals would destroy thousands of American family farms overnight. House Democrats, for their part, would like to distract the Federal Reserve with social policy while inflation is at a 40-year high.
These ideas are a slap in the face to every American farmer, rancher, and agricultural producer. While this administration burns through money like there is no tomorrow, American producers are working tirelessly to keep America secure despite the effects of inflation on their businesses. We owe them not only a debt of gratitude, but also real solutions to the inflation crisis before it is too late.
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