Collapse of budget deal over Trump’s objections leaves American farmers in limbo

Associated Press

MINNEAPOLIS (AP) — American farmers are hoping that aid to agriculture will be revived as Congress struggles to pass a short-term spending bill that would keep the federal government funded and avert a looming partial government shutdown set to begin after midnight Friday night.

A one-year extension of federal farm programs, around $30 billion in economic relief and an agreement that would increase sales of a higher blend of ethanol, called E15, were part of a bipartisan deal that collapsed Wednesday after President-elect Donald Trump and his allies denounced the overall package. It was unclear Thursday whether a new deal could come together in time to prevent a shutdown — and whether any of those farm provisions would survive whole or in part, either as part of an extension or in separate legislation.

The proposed “continuing resolution” that congressional negotiators unveiled Tuesday night would have extended Farm Bill programs for another year after lawmakers were unable to agree on a new five-year package despite months of negotiations. It also included $10 billion to help farmers who’ve been struggling with high interest rates, declining crop prices and rising production costs that are outpacing farm revenues. Producers also would have gotten $20 billion of the $100 billion in disaster aid that was part of the failed package.

Even as he rejected the deal, Trump signaled that he was at least aware of concerns in farm country, which voted heavily for him in the election.

“Republicans want to support our farmers, pay for disaster relief, and set our country up for success in 2025. The only way to do that is with a temporary funding bill WITHOUT DEMOCRAT GIVEAWAYS combined with an increase in the debt ceiling. Anything else is a betrayal of our country,” Trump said in a joint statement Wednesday night with Vice President-elect JD Vance.

Farm groups say the aid they had hoped for wouldn’t have made producers whole, but it would have given them some badly needed stability as they apply for loans this winter to prepare for the spring planting.

According to fresh projections from the U.S. Department of Agriculture this month, net farm income is expected to decline 4.1% for 2024 after falling 19.4% in 2023 from the record highs reached in 2022.

American Farm Bureau President Zippy Duvall urged Congress in a letter Wednesday night to preserve the farm provisions in a new agreement.

“Any alternative Continuing Resolution (CR) must include: a farm bill extension, aid to rebuild after natural disasters, economic assistance to bridge the gap until we can get to a new farm bill, and year-round E-15 sales,” Duval wrote. “Weather-related natural disasters in 2023 and 2024 have crippled communities across the country. The weather events may have passed, but unthinkable wreckage remains. Entire communities must be rebuilt.”

Carolyn Olson — who raises organic corn, soybean and wheat near Cottonwood in southwestern Minnesota — said relief would be helpful to farmers who’ve been affected by natural disasters, whether that’s drought in the Midwest or hurricanes in the Southeast.

Olson, who is vice president of the Minnesota Farm Bureau, said November through February can be a critical time because it’s when farmers make their big decisions for the next year.

“It’s really important for farmers to have some certainty and for their leaders knowing that it will be OK to lend to their farms,” she said. “That’s kind of the big unknown that we’re facing. Some farmers are very concerned about what their loan officers are going to say.”

That includes the Olsons. While their corn crop was good, and they also make money from finishing about 14,000 conventional hogs a year, they lost their entire 2024 wheat crop to disease. So that has added to the stress they’re facing, she said. And as organic farmers, they don’t have the cost of herbicides but still face high costs for other expenses, such as fuel to heat their barns.

“We need Congress to vote yes on this,” Olson said.

Corn growers had pushed hard for a provision in the failed proposal that would allow for permanent, year-round sales of gasoline with 15% ethanol, which is produced from corn. Standard unleaded gas can contain up to 10% ethanol.

While the first Trump administration backed year-round sales, opposition by the oil industry, and concerns that the fuel could worsen smog during warm weather, made summertime E15 sales dependent on annual waivers during the Biden administration. The Environmental Protection Agency in February approved year-round E15 only for eight Midwestern states starting next year. That uncertainty has dissuaded many gas stations from carrying the fuel. The industry hopes year-round sales nationwide will increase its availability and support demand for corn.

Jim Kanten, who grows about 2,300 acres of corn and operates a custom manure-application business with his father and brother near Milan in western Minnesota, said he hopes the E15 provision makes it to the president’s desk.

“It’s been a long process,” Kanten, who serves as president of the Minnesota Corn Growers Association, said. “We’ve been working on this for over 10 years.”

And while producers need a temporary Farm Bill extension, Kanten said they really need the stability of a fully updated five-year package.

But pork producers weren’t happy with the proposal that emerged Tuesday. They wanted Congress to block a California animal welfare law that took effect last year banning the in-state production and sale of fresh pork from hogs born to sows kept in tight confinement. Producers in other states must meet those standards if they want to sell pork in California. Farm groups say that’s raising costs for producers across the country and increasing prices for consumers nationwide.

“After years of losing money and forcing family farms out of business, we needed the certainty to make decisions yesterday,” said Lori Stevermer, a pork producer from Easton in southern Minnesota, who’s president of the National Pork Producers Council. “Congress’ complete disregard and inability to adequately provide assurance for producers is sure to make this a bleak holiday season for many farming families across the country.”