Farm Budgets Squeezed by Soaring Inputs, Interest, and Labor Costs

AFBF Associate Economist Samantha Ayoub joins us to dive into H-2A visa program changes and what can be done to ease the pressure on producers.

WASHINGTON (RFD-TV) — As harvest rolls on and farmers study their balance sheets, they see just how squeezed they are by rising input costs and low crop prices. American Farm Bureau Federation (AFBF) economists break down some of those costs.

“Fertilizer is rising again. It’s still not to those highs of 2022, but it’s going up—chemicals, fuel, and energy,” said Faith Parum with AFBF. “Interest is really becoming a larger and larger expense in farm budgets, as farmers continue to take out operating loans to make it to the next marketing year, due to all of the decreases in commodity prices. Labor is always increasing, as well as some machinery and repairs.”

AFBF economists say several crop farmers are already facing losses, with cotton down over $300 per acre.

Reforming the H-2A Visa Program to Reduce Farm Labor

For many farmers, reducing farm labor costs is one significant way to ease their input cost burdens. The U.S. Department of Labor is implementing changes to how foreign agricultural guest workers are paid under the H-2A visa program, revising the method used to calculate the Adverse Effect Wage Rate (AEWR) — the minimum rate employers must pay to ensure domestic wages aren’t undercut.

The adjustment comes as a relief to many farmers and ranchers who have long called for reform, saying previous wage calculations were inconsistent and burdensome.

Samantha Ayoub, Associate Economist with the American Farm Bureau Federation, joined us on Thursday’s Market Day Report to dive into those labor concerns and what can be done to ease the pressure on producers.

In her interview with RFD-TV News, Ayoub explained that the new rule outlines a more standardized process for setting wage rates. However, she noted that non-wage costs—such as housing, transportation, and compliance—remain significant factors for producers using H-2A labor.

Ayoub emphasized that labor remains one of the highest costs in agriculture today, but feels these changes could bring greater predictability to farm labor expenses.

Related Stories
We caught up with Karen Braun, Chief Market Analyst at Zaner Ag Hedge, at the Women in Agribusiness to discuss the data behind commodity trading.
Weston Brown joined us on Monday in the RFD-TV Studios in Nashville to share how he is preparing for the upcoming National FFA Convention & Expo.
Missouri Director of Agriculture Chris Chinn joined us Monday to share highlights from Secretary Brooke Rollins’ visit and her perspective on USDA’s new initiatives.
RFD-TV Farm Legal and Taxation expert, Roger McEowen, with the Washburn School of Law, joined us Monday to break down the changes and explain what producers should know.
North Dakota Farmers Union (NDFU) President Mark Watne joined us Monday to share his perspective on the America First Trade Promotion Program and potential implications for producers.
Duane Simpson, CEO of the National Council of Farmer Cooperatives (NCFC), joined us in Monday’s Market Day Report to share his perspective on the USDA’s plan and potential impact on producers.
RFD-TV Farm Legal and Taxation expert Roger McEowen joined us Friday to break down the executive order and what it means for farmers and ranchers.
Chad Rezniek with the Colorado AgrAbility Project joined us as part of National Farm Safety and Health Week to discuss the growing need for behavioral health support in rural communities.
Farm CPA Paul Neiffer joined us on Friday’s Market Day Report to break down what this extension means for affected ranchers.