(PatrioticPost.com)- This year was a difficult one for many industries, but especially for farmers in America, who suffered as a result of inflation, shortages in the supply chain and challenging drought conditions.
But, according to one fourth-generation dairy farmer, 2023 could be even worse. Stephanie Nash, who is an agricultural advocate and a farmer in Tennessee, spoke with Fox News recently and said:
“I definitely think we have a food security threat. I believe 2023 is going to be rough, worse than this year.”
For 2022, food prices have outpaced inflation. The Bureau of Labor Statistics reported that overall inflation rose to 7.1% in November, while food prices have increased 10.6% over las year.
This year has been a perfect storm of different things that have factored into the much higher food prices. Nash said that there have been extreme weather conditions that have impacted farming, combined with shortages in fuel and fertilizer.
In addition, interest rates rising have caused major financial challenges for an industry that relies heavily on debt financing.
The Department of Agriculture says that many farmers in the U.S. obtain short-term loans with variable interest rates that help them pay for machinery, livestock, fertilizer and seeds. Because the Federal Reserve has been aggressive with its rate hikes this year, it’s driven up the cost of doing business for farmers, with rates going from as low as 0% to as high as 4.25%.
As Nash explained:
“You have family farmers and ranchers that can’t pay their bills. You talk about loans – that’s a big deal. Food costs are increasing, the overall production of our operations are increasing. We have to be able to get paid more to make it.”
This year, the total interest expense that the farming sector will incur is expected to reach as high as $26.5 billion, according to data from the USDA, which is almost 32% more than it was last year.
Bankers and farmers that Reuters interviewed for a recent story said that farmers are having to decide between reducing their cattle and crops, or trying to endure as is while struggling to repay some larger loans.
“2022 was a really hard year. I think there’s going to be a lot of shortages next year for sure. We’re going to have a supply chain shortage. We’re going to have an increase in our food [prices] at the grocery store. I don’t think it’s going to go down anytime soon, and I think Americans are really going to be hurting in their wallet.
“We see products in the grocery store increasing, and I think a lot of people don’t understand that. We’re not the ones pushing for increasing. We are making less than ever.”
Droughts have been rampant across the country this year, too. The U.S. Drought Monitor reported that as of earlier this year, 53.2% of the lower 48 states were in a drought.