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Many Midwestern farmers have another economic cushion in land values that have risen along with market prices for their crops, said Mike Duffy, an agricultural economist at Iowa State University, who found that in his home state, farmland values rose 32.5 percent last year. The last time prices rose by that much was in the 1970s, Duffy said.
Broadly speaking, congressional support for farmer and rancher aid seems to have started cooling several years ago when lawmakers began tightening conditions for assistance, said Bradley Lubben, a University of Nebraska-Lincoln extension public policy specialist.
In 2008, farm bill writers authorized disaster programs for uninsured commodity crops, tree farms and livestock to reduce the need for stand-alone legislation, he said. Those programs expired in 2011, a year before the rest of the 2008 farm bill (PL 110-246) and the start of the 2012 drought. The early expiration kept the legislation within budget but left those farmers and ranchers without a federal backstop.
“The livestock folks are suffering doubly,” Lubben said. “They lost livestock production and capacity as well, and there were forage losses that traditionally are not fully insurable. They didn’t have that same crop insurance portfolio working for them.”
Lubben said the need for aid exists but that Congress appears to have little appetite for ad hoc spending in a time of big budget deficits.
Since the impasse this summer between the House and Senate over drought aid, Lubben said, livestock ranchers have had to move on and make decisions about their operations. They have made use of the Agriculture Department’s release of acres from the environmental Conservation Reserve Program for forage. They have thinned herds, sending animals to slaughter earlier. They have scaled back their production plans. Others have gotten out of the business all together.
“Having disaster payments that cover one, two or three months of feed costs is somewhat irrelevant, at least irrelevant to the production plan because that plan is in place. It eventually could help with cash flow, but it is after the fact,” Lubben said.