Drought to blame? ‘A very challenging time to be a farmer in Virginia’

Farmers in Virginia and nationwide are struggling with substantial losses and rising production costs. The drought and storm damage has exacerbated net farm income losses in the state, according to a Virginia Farm Bureau expert.

“This trend is very concerning,” said Tony Banks, senior assistant director of agriculture, development and innovation at Virginia Farm Bureau Federation. “It’s a very challenging time to be a farmer in Virginia.”

In the Department of Agriculture’s 2024 farm income forecast, net farm income is set to decline nearly 25 percent within two years. In Virginia, the drop in net farm income for grain and soybean producers will likely be greater than the national average, Banks predicts.

A drop in receipts for grains and oilseeds is due to a global surplus resulting in weaker market prices.

“In both 2023 and 2024, local poultry and swine production cutbacks have not only lowered local grain and soybean prices relative to national prices, but traditional markets have been altered significantly leading to higher storage and transportation costs for farmers in many cases,” he said.

While 2022 was a record year for net farm income, 57 percent of farm operations still reported a financial loss, according to the Census of Agriculture.

“The fact that the majority of farms experienced losses in such a high-income year underscores the fragility of the farm economy,” said Daniel Munch, an economist with AFBF. “Without targeted policy changes, such as an updated safety net in a farm bill, farmers will struggle even more in the face of declining income and rising debt.”

Banks said farmers should consider any risk management program or tool available to them.

“If crop insurance is not available for a crop, livestock or dairy enterprise, farmers should consider risk coverage programs available,” Banks said. “Or consider price risk management strategies and instruments when marketing crops and livestock. Producers may still be able to find ways to lower their production input costs, at least in the short term.”