Kauffman’s branch is one of 12 regional Federal Reserve branches in the U.S. The Kansas City branch is the most agriculture-centric in the nation. An economist by training, Kauffman said the listening tours help round out the data they provide to inform policymakers who shape fiscal policy.
‘We want to give policy makers the best information possible; topics can surface in discussion that do not surface in data,” Kauffman told the gathering. “When we talk about agriculture at a national level, it is important that we are inclusive.”
Kauffman heard frustration among the common themes that emerged.
The drying up of credit and local banks placing cash flow over farm equity as a requirement to lend, and the high interest rates overall. Suppliers noted that customers are spending less, and when they do, they use credit cards but balk at paying credit card fees — additional costs that farm markets and suppliers are now forced to pass on.
The uncertainty of labor availability and labor costs.
Of great concern were the skyrocketing prices of utilities such as electricity and diesel, and fertilizers, which deeply impact cash flow. As a result, farmers often delay investments in new infrastructure, innovations, poultry houses and equipment. Instead, they are opting to maintain and repair what is already in place.
The shrinking of available farm land and the high price farm acres command in the First State.
According to the 2022 USDA National Agriculture Statistic Services, 31% of Delaware’s 522,834 acres of farmland is leased to private farmers.
Typically, a tenant farmer will lease year-to-year. Landowners are increasingly tempted by the high prices offered by commercial and residential development. Tenant farmers face few guarantees they can continue to farm the land they know, and makes extended planning nearly impossible.
Everyone in the room had a vested interest in how to keep their land in agriculture.
Delaware grain farmers receive a premium for grain due to their proximity and close relationship with Delmarva’s poultry growers, but there is not enough land to fill the need, especially for corn, which must be imported at a much higher cost.
The lack of a U.S. Farm Bill, currently stalled in Congress, was noted.
Dave Marvel felt sharing his perspective was valuable. Marvel farms in Kent County and grows small grains, corn, soybeans, wheat and barley, sweet corn for processing and watermelons.
“This was valuable for us as farmers and agriculturists in the area to realize that the Federal Reserve is interested in hearing from us and that our needs might not be the same as everyone else’s needs,” Marvel said. “Even though the Reserve impacts everybody, right now, with the economy of farming, it was definitely important to share how finance and interest rates affect our future.”
