The Widening Net

Experts discuss how government aid can inflate input costs.

- Cassidy Walter

For years, I dreamed of trading in my tiny car for an SUV, and in the summer of 2022, that dream came true. I named my green dream car Elphaba, after the green-skinned witch in the “Wicked” musical. This past Thanksgiving weekend, when we got our first big snow of the season, my husband made sure to make room for Elphaba in the garage. When I went to work the next week, the world around me was blanketed in white, but Elphaba was as green as her namesake.

I think sheltering what is precious to us is natural. Which is why it’s amazing to me that farmers’ livelihoods stand exposed, year in and year out. Optimistically, each spring, seeds are planted in the hope that with the right care, the nation’s food supply will emerge. At any moment, a storm, fire, or flood could dash those hopes — and there isn’t a field-sized garage to shelter them.

But there is a net. The federal government safety net is meant to negate some of that risk. But can that net get too wide? Experts say yes — it can lead to inflated input and land prices.

“Anytime you have a marketplace, whether it’s the broader U.S. economy or just the agricultural economy, and you start injecting a ton of cash into [it], that cash is chasing a fixed number of assets and will cause the value of those assets to inflate,” said Owen Wagner, a senior grains and oilseeds analyst with Rabobank.

So, where is the increase in support coming from?

More Ad Hoc Payments

USDA data shows a trend toward more frequent payments not tied to established programs. Examples include COVID-19 pandemic assistance, disaster assistance, and the $12 billion bridge payments USDA announced in December.