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
Jake Charleston with Specialty Risk Insurance says recent futures market moves are leaving cattle producers unsure about price trends.
Brooks York with AgriSompo joined us to break down livestock protection coverage, market timing, and how producers can access risk management tools.
European officials say the temporary move is aimed at easing pressure on farmers as conflict in the Middle East disrupts fertilizer markets.
Jeramy Stephens with National Land Realty joined us to share guidance on preventing land fraud, identifying scams, and protecting farm and rural property owners.

LATEST STORIES BY THIS AUTHOR:

Just like cows, kids experience ups and downs—from small frustrations to unexpected moments—but there is still good in every day.
Dr. Jeffrey Gold joins us on Rural Health Matters to discuss rural mental health awareness, the importance of reducing stigma in agriculture, and resources available to farmers, ranchers, and rural families seeking support.
Utah Senator John Curtis joins us for “Champions of Rural America” to discuss new legislation to improve forest management and wildfire prevention and its broader implications for rural communities and infrastructure.
NRECA CEO Jim Matheson joins us to discuss rural electric co-ops’ push for expanded USDA loan programs, rising energy demand from data center expansion, wildfire mitigation and other policy priorities impacting rural power infrastructure.
StoneX’s Josh Linville discusses USDA’s efforts to boost domestic fertilizer production and his outlook on supply and prices.
With the Farm Bill now in the Senate’s hands, industry groups say the stakes are high—and timely action could be critical for producers navigating a difficult economic environment.