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Common Questions About Agriculture – Answered!

Farm and commodity programs equal only 18% of the 2018 USDA budget. Conservation and forestry accounts for 7% of the total USDA budget. Rural development, research, food safety, marketing and regulatory, and departmental management accounts for 6% of the budget. The primary focus of the USDA’s budget lies with the food assistance and nutrition programs. These account for nearly 69% of the budget. These programs include the Supplemental Nutrition Program or SNAP (formerly known as Food Stamps); Women, Infants and Children or WIC; and school lunch/breakfast programs. USDA also has many programs that provide benefits to all Americans, ranging from environmental enhancement through its conservation and forestry programs to assisting rural communities provide critical services such as water, sewer treatment, electricity and telecommunications as well as building schools, churches and rural businesses through its rural development programs.

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Agriculture has a positive trade balance, which means we send out (export) more than we bring in (import). In 2019, the United States agriculture exports accounted for $135.54 billion with soybeans, beef, veal, pork, poultry and fresh and processed fruits and veggies topping the list. In 2019, the United States ag exports account for $128.718 billion with soybeans, beef, veal, pork, poultry and fresh and processed fruits and veggies topping the list. United States agriculture imports total $127.6 billion with coffee and cocoa, fresh and processed vegetables, and grains and feeds accounting for the majority.

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According to the USDA Economic Research Service, $140.5 billion worth of American agricultural products were exported around the globe in 2017. China and Canada are the largest trading partners of the U.S.; together accounting for 46% of all U.S. agricultural exports. Changes in trade agreements directly affect the amount of trade between the U.S. and other countries, so it’s important that individuals who negotiate these trade agreements understand the impact it has on U.S. farmers and ranchers along with all U.S. consumers.

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American agriculture is a matter of national security. We have made astounding advancements in agriculture since colonial times. During colonial times one farmer fed four others. Today, one farmer produces food for 166 others. American agriculture is vital to our country! Consider the impact to not only the United States, but globally, if our food supply was interrupted or contaminated. The 2015 House Agriculture Committee Chairman K. Michael Conaway shared, “Agriculture and national security are intertwined in many different ways — whether it is insuring that food is available to meet nutritional needs for both those within our own borders and those around the world, ensuring that food coming into our borders is disease- and pest-free, or guaranteeing that farmers and ranchers have the needed policy tools in place to continue producing food and fiber.”

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When you see an increase in price at the grocery story, don’t assume it’s going into the pocket of your local farmers. For the most part, farmers are price takers not price setters. When their crop or animal is ready to sell, they have to sell at the current price. On average, only 15 cents of every retail dollar return to farmers and ranchers. And as food prices increase, the amount of money making its way back to farmers doesn’t always correlate. In fact, in many cases farmers and ranchers see an increase on their end in the form of the cost of inputs. These inputs include land, equipment, fertilizer, chemical, seed, buildings and facilities, maintenance, labor, fuel, heating, feed, taxes, insurance and more. And as these expenses continue to rise, farmers and ranchers continually strive to increase their yields and efficiency so they can remain competitive and profitable in the long term.

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Not necessarily. According to the USDA Economic Research Service, off-farm costs such as marketing, processing, wholesaling, distributing and retailing food products accounted for 85 cents of every retail dollar spent on food in 2019. That leaves an average of only 15 cents returning to farmers and ranchers. Over the years, this number has been on the decline. In 1980, farmers received 31 cents out of every retail dollar spent on food in the United States. And, while this number continues to decline, the farmers’ expenses to produce food for our country continues to rise.

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Just because a farm is large in number of acres, does not mean it is a corporate farm. Individuals, family partnerships or family corporations own 98% of all U.S. farms and ranches. Non-family corporations own just 2% of America’s farms and ranches. In recent years, some of these family farms have chosen to incorporate to take advantages of taxes, business structure, family home protection, etc. 

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America’s farms are still family farms. Family farms do incorporate for the same reasons that other businesses incorporate — taxes, structure, family home protection, etc. And yes, some family farms are becoming larger to take advantage of efficiencies of scale and to spread out their overhead costs. However, they are still considered family farms. Today, about 98% of U.S. farms are operated by families — whether individuals, family corporations or family partnerships.

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