Breaking Down the 2024 Farm Bill: What Producers Need to Know

It’s no secret that the process of passing the new farm bill is moving at a snail’s pace. Congress was supposed to renew this large and complex piece of legislation in 2023 to replace the 2018 Farm Bill but extended it one year into 2024.

Now, the 2024 planting season is behind us and crops are growing, but so far only the House Agriculture Committee has passed a bill out of Committee. Meanwhile, the Senate Agriculture Committee has managed to release a concept draft but has yet to pass a bill.

Will we get a farm bill passed this fall after the elections or will we have to wait until 2025 to see what policies Congress finally settles on? For a better understanding of what’s happening in Washington and how the outcomes might affect producers, we caught up with Bryan Dierlam, Director of Government Relations for ADM.

Dierlam is a native of Victoria in southeast Texas, where his family has owned and operated a farm and ranch supply store for three generations. He worked previously in Kansas, Montana, and Idaho trading grain and other commodities. Before joining ADM, Dierlam worked for the National Cattlemen’s Beef Association and Cargill in addition to serving on the staff of the House Agriculture Committee.

Why do we have a Farm Bill and why does it matter?

At its very core, the Farm Bill exists to make sure there are folks out in the countryside growing the food and fiber our country and the rest of the world needs. It’s there to make sure that producers have some type of safety net so that, despite the ups and downs in the vagaries of prices and weather and global policy, there’s at least some measure of stability so that producers can keep doing what they do: producing food. And every few years it gets evaluated to make sure it’s meeting current needs from a fiscal and policy standpoint.

Why isn’t there a new Farm Bill yet? Why is it so difficult?

While it ought to be easier, the Farm Bill is complicated. As it’s evolved over the years, more policies have been added to it. There are now 12 different titles (or bill sections) that cover things as diverse as research, conservation, rural development, energy, and trade. Along with the commodity title that addresses prices to take care of the production side there is the nutrition title that helps ensure people’s basic food needs are met.

There is also a crop insurance title, a forestry title, and the catch all miscellaneous title. So, there are a lot of policy issues the ag committees have to work through and do so within the budgetary and policy constrains the committees and Congress are working under.

Right now, we have two developments that are making it more challenging for policymakers to get agreement on the Farm Bill from a policy and fiscal standpoint compared to where things were in 2018. First, we’ve gone through an inflationary period since 2018 that has increased the desire for producers to address the commodity title to improve the safety net. Second, that same inflation has also increased the cost of USDA food and nutrition programs.

So as Congress considers modifications, the reality is that these things cost money and there’s only so much money to go around. And when funding is tight, Congress has to make some really hard choices, which means things can quickly get controversial and political.

Why do producers want a new farm bill and does the House bill address it?

Since the last Farm Bill was passed in 2018, we’ve seen an increase in the cost of inputs. If you just go down the list of inputs needed to put in a crop, interest rates are up; land prices or land rents are up; the cost of seed is up; the cost of fertilizer is up; the cost of fuel is up. Everything is up. So, producers are concerned that – with cost of production at historic levels – the Farm Bill safety net does not provide much of a net and would like to see reference prices increased.

The bill passed by the House Agriculture Committee on May 23 increased reference prices by 10-20 percent, depending on the commodity. For example, the House Ag Committee bill raised the corn reference prices from $3.70 to $4.10 and soybeans from $8.40 to $10.00.

What will the Senate do and what might the final Farm Bill look like on this issue? 

It’s too early to tell what the final resolution will be, but given the support from producers, the action taken by the House Ag Committee, and the policy outlined by Senate Ag Committee Ranking Member John Boozman (R-AR), it’s hard to imagine that some adjustment to reference prices won’t be in a final compromise bill – whenever it emerges.

However, there are some other fiscal and policy changes that must be addressed. Some members of Congress from certain states think that the reference price increase focuses too much on row crops and not enough on fruits and vegetable and other programs. Some proposed modifications to nutrition programs result in cuts that are too deep. These issues will have to be resolved within the House as that bill goes to the House floor and and within the Senate before either the Senate Ag Committee writes its bill or considers a bill on the Senate floor.

Regardless, a workable safety net is imperative for producers so they can manage the risks they face in the marketplace. Furthermore, members of Congress who represent producers from farm states and farm districts have paid close attention to producers’ concerns regarding the current costs of production.

What are some other important parts of the Farm Bill?

While raising reference prices is a top priority, there are other priorities that are important to American agriculture. Within the trade title, for example, there is a section of the bill that funds efforts to try to expand foreign markets for US ag products.

Specifically, there are programs in the trade title that hundreds of ag groups, organizations, and commodity organizations want to see expanded: the Foreign Market Development program and the Market Access program. The House bill doubles funding for these programs and Senators have made clear they intend to increase funding for these programs as well.

Both programs are designed to grow demand for US agricultural products abroad and neither has seen an increase since the 2002 Farm Bill. The entire industry is united in trying to double those programs in the next farm bill so that we can get more customers around the world buying US ag products.

What else could the Farm Bill do that might impact producers?

One thing that might not get as much attention is the Farm Bill’s research title, which can be an important driver of innovations and help find new uses for US agricultural products. At ADM, we’ve been looking at research programs that could help develop bio-based products that can replace chemicals and plastics traditionally made from fossil fuels with ones instead derived from ag products. You can take a corn kernel and literally turn it into a thousand different products like styrofoams, absorbents, powders, cosmetics, or alcohols made from ag products.

We’re working with trade associations to expand the bio-based program at USDA so that we can add value in various ways to many of the ag commodities that producers grow so that we’re creating new uses for ag products, new sources of demand, and new industries through bio-based products. The House bill took steps to expand this program and there are expectations that a Senate bill would do the same.

How could a new Farm Bill affect regenerative agriculture?

The conservation programs as they exist today have been very popular, but underfunded and oversubscribed. So, it remains a bipartisan priority among the members of the ag committees in the House and Senate to provide more funding and more flexibility for these programs to help producers reach their conservation and sustainability goals.

We’re very proud of the ADM re:generations program and continue to support conservation programs that are locally led, voluntary, and help producers achieve their conservation and sustainability goals.

What’s your message to producers concerned about the Farm Bill?

We’re definitely in uncertain times, but I would tell them that they continue to be well-represented by trade associations, advocates, and members of the ag committees who continue to work hard every day to represent them well to ensure they have policy consistency that gives them a workable safety net. They’re working to provide the market access that can help ensure producers’ long-term prosperity, so they can be successful today and so that future generations on their farm can be prosperous as well.

Of course, there’s still work to do, but the ag committees continue to work hard to figure out what sort of solutions can best address all the issues that matter most to producers. I’d tell them to be patient. Don’t get discouraged. Have faith that a new Farm Bill will eventually see the light of day. After all, the ag committees are actually in general agreement over the vast majority of policy issues and at some point, the committees and the House and Senate will pull together to resolve the major differences over the cost of nutrition spending and how to allocate the available funds.