America Is Crippling Small Farmers
Farmers say fuel, fertilizer costs are pushing them to brink.
The current state of American family farming mirrors that of our energy industry: a system of highly efficient production and abundance that has now been driven to crisis and shortage by misguided government policies.
Farmers are masters at adaptation and managing weather and price fluctuations. But the extreme cost inflation of diesel fuel and fertilizer is taking a severe toll, they say, and will not only continue to drive prices up in grocery stores but could have lasting repercussions in the years to come.
Randy Linton is a fourth-generation farmer and rancher in Oklahoma. “My grandpa owned it, then my dad took over when my grandpa retired, and I helped my dad out wherever I could,” she said.
She runs the farm now, and much of her business today is providing grazing fields for other farmers’ cattle. “A stocker will send us cattle from Mississippi, and we take care of them,” Linton explained. “We get paid per pound of gain,” or by the amount 0f weight the cattle put on while grazing in her fields.
The fertilizer she uses to grow feed crops used to cost $18 per acre two years ago. “This past year it was $35 per acre, and in this farming season that we’re in right now, it’s going to cost us $75 an acre.” She hopes stocking fees will go up enough to cover her costs, but cattle owners may not be able to afford that, opting to pass her by and corn-feed their cows instead of grazing them.
“If that happens, then we won’t make any money next year and we will be losing money, putting in this high dollar crop this year,” Linton said. “One bad year like that could bankrupt us and everybody. The small farmer is one bad year from being gone.”
Lorenda Overman raises hogs and grows corn, soybeans, and sweet potatoes on her North Carolina farm. Diesel- and fertilizer-price hikes have driven her total costs up from $700 per acre to more than $900 per acre. She’ll earn $825 per acre selling this crop, putting her in the red for all the money she has invested this year.
“You bury all your liquid assets in the ground to plant a crop and then you pray over it and you hope that it comes back out of the ground to you,” said Overman. “But when that hole is so deep, like $900 an acre, and I’ve got a thousand acres to farm, that’s just a huge hole to climb out of.
“I’ve seen years when it wouldn’t rain, and I’ve seen years when prices were really low,” she said. “I’ve seen years when we couldn’t pay the operating loan and we had to roll it over to next year. But I’ve never seen the price of an acre of corn being $900 an acre, and I’ve been doing this for 40 years.”
“Lenders are nervous,” Overman said. “Banks are very nervous about operating loans to get crops in the ground.” Under current conditions, she thinks many family farmers could go under.
“Once the farm is gone, it’s gone,” she said. The years it takes to make farmland productive and the enormous investment required, with combines alone now costing $500,000 or more, will prevent those who lose their farms from ever coming back.
The crisis farmers face today stems primarily from the crisis in fossil-fuel production. The Biden administration’s antipathy toward fossil fuels and the consequent flatlining of U.S. oil production has been exacerbated by shortages abroad.
Russia is the world’s third-largest oil producer, after the U.S. and Saudi Arabia, and is the largest exporter of fertilizer, an oil derivative. Although America does produce domestic fertilizer, it is the world’s third-largest importer, leaving U.S. farmers subject to global price hikes at a time of severe worldwide fertilizer shortages.
Western sanctions, following Russia’s invasion of Ukraine, eliminated a critical source of fertilizer. China is also a leading exporter of fertilizer, but it put a moratorium on exports in October. Construction of new fertilizer plants in America normally takes three to five years, but supply-chain disruptions and increased government regulation will slow construction further. And plants would still need oil as an input.
Pennsylvania farmer Ryan Brown said his cost for fertilizer has more than doubled from $400 a ton last year to $900 a ton this year. Despite that, he is optimistic that he’ll do all right in 2022. He runs a direct marketing beef operation that allows him to pass on much of his cost increases to buyers, but he is concerned about what is in store a year or two down the road if costs don’t come down.
With the price of fertilizer skyrocketing, he explained, “guys are going to pull back on how much they use. The more they pull back, they’re mining the soil of what nutrients are there.” Once that happens, “you reduce your yield, you reduce your bushels in the supply chain.”
Brown said he believes many family farmers will find a way to survive this year, and that next year looks like “a questionable break-even year. But I think 2024 and 2025 is make it or break it. That’s when you’re going to see guys go under, and that’s simply because they’ve mined that soil. They just won’t have the bushels there to sell, to even cover what they’ve put into it.”
Jackie Boudin, a Texas farmer and rancher, said he is among those who can’t afford to fertilize his fields. “I talked to a fellow farmer today,” Boudin said. “He has not fertilized this year and I have not either.”
“When you sell cattle, the prices used to be good enough,” he said. “And they would be if it weren’t for the crazy prices we’re paying for fertilizer, fuel, and feed. You can’t bring in enough to cover all that.”
The farm has been in his family for a century, but to stay solvent now, Boudin has had to put 200 acres of his land up for sale.
“It was land that I inherited, so I’d hoped to pass all of it on to the kids,” he said. “That was the plan and I still hope to pass the majority of it on. It’ll be a smaller herd because there’s less land, but still at least I can get back to a more operative level.”
Despite the inflationary crisis, the Biden administration continues to push a green-energy agenda, impeding fossil-fuel production in favor of wind and solar energy. President Biden lauded oil price hikes as “an incredible transition that is taking place that, God willing, when it’s over, we’ll be stronger and the world will be stronger and less reliant on fossil fuels.”
Energy Secretary Jennifer Granholm deemed rising oil prices “an exclamation point” for the need to transition to wind and solar and “build homegrown clean energy.” Granholm pointed out previously that “if you drive an electric car, this would not be affecting you.”
Samantha Power, head of the U.S. Agency for International Development, said the problem of fertilizer prices can be solved by “natural solutions like manure and compost, and this may hasten transitions that would have been in the interest of farmers anyway. Never let a crisis go to waste.”
Despite the dream of a carbon-neutral future, however, fossil fuels today remain a large and essential component of food production. Farmers use vast amounts of diesel fuel and fertilizer, and policies that create shortages for these components undermine America’s ability to feed itself.
Regarding the use of manure as a substitute, Boudin said, “I clean my stalls out twice a day [for it]. But there’s way too much farming and that’s not a drop in the bucket for the amount of fertilizer we need. If you had a little old garden spot, you could probably keep it fertilized like that. You’re not going to keep the fields fertilized with manure.”
“In our part of the country there aren’t enough large dairies or feedlots where we could get manure,” Linton said. “And it’s not that I don’t see how you could run a tractor off of solar energy, I’m sure they have a solar-powered tractor or a tractor that you can plug in, but in our part of the country, we have to run a tractor off of diesel fuel.”
While electric farm tractors are currently in development, they are not yet widely available or affordable for most large farmers. As with power generation and our electricity grid, the push to exit fossil fuels has reduced an essential energy source long before wind, solar and electric are capable of reliably filling the gap.
Amidst the food shortages during the peak Covid days, many progressives expressed a lack of concern, even a disdain, for Americans who had been so “pampered” by abundance. In a Washington Post column titled, “Don’t rant about short-staffed stores and supply chain woes,” Micheline Maynard scoffed that “American consumers, their expectations pampered and catered to for decades, are not accustomed to inconvenience.”
Senator Bernie Sanders stated that he was not troubled by the food lines he routinely saw in the Soviet Union, saying “in other countries, people don’t line up for food, rich people get the food and poor people starve to death.” And in October, then-White House press secretary Jen Psaki spoke dismissively of supply-chain breakdowns as “the tragedy of the treadmill that’s delayed.”
Asked if America could experience more severe food shortages, Linton said, “absolutely not.” Despite everything farmers are going through, she said, “we can sustain ourselves off of American agriculture. If the U.S. would quit trying to eliminate the small American farmer, there’s enough of us out here that we can grow our own food.”
Boudin said he also believed American farms would meet our needs for food. “If there’s a food shortage,” he said, “it’s going to be caused by the government. It’s not going to be a natural thing.”
“We need to be food independent; that’s a national-security issue to me,” Overman said. “A country that can’t feed itself is a country that can’t protect itself. It’s very scary that we just had to go to Germany to get baby formula.”
As for what consumers will see, Boudin said that “prices are going to keep going up at the grocery store. They’ve already gone up, but they’re just going to keep going higher.”
Kevin Stocklin is a writer, film director, and founder of Second Act Films, an independent production house specializing in educational media and feature films. Previously, he worked in international banking for more than a decade.
This article was supported by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the responsibility of the authors.