By Andi Anderson
Farm crops in 2024 are experiencing financial difficulties due to low crop prices and rising production costs. This has become a significant issue in the current farm bill discussions. A method has been used to assess net returns for major farm program crops, including how crop insurance factors into the equation.
The findings show that most crops have negative net returns this year, with only Japonica rice showing a positive result.
In fact, cotton, sorghum, and barley are among the hardest-hit crops, with losses exceeding $100 per acre. While negative net returns can signal the market's intent to reduce planting of certain crops, persistent low returns are concerning for farmers.
When comparing 2024 with the past 10 years, crops like barley, peanuts, and sorghum are still performing poorly, although their losses are less severe than the average from 2014-2023.
Insurance plays a crucial role in cushioning these losses. The projected insurance price, set before planting, is higher than the harvest price, meaning insurance payments will reduce the negative net returns for most crops.
For barley, corn, soybeans, wheat, and cotton, these payments help increase net returns by over $50 per acre, offering some relief to farmers. However, cotton and sorghum still show higher losses compared to their 10-year average.
In conclusion, while net returns remain low for many crops, crop insurance provides a safety net. Moving forward, policymakers must be cautious about overlapping assistance programs and focus on using resources wisely to avoid unsustainable outcomes.
Photo Credit: istock-mailson-pignata
Categories: Illinois, Harvesting