January 2023, Volume 29, Number 1
US: Farm Bill, CEA
Net US farm income is projected to top $160 billion in 2022, the highest in inflation-adjusted terms since 1973. Higher prices for crops and livestock commodities mean that farmers are spending more on machinery and farm land.
The average value of US cropland reached a record $5,000 an acre in 2022; pasture land was worth a record $1,650. Low interest rates, high crop prices, and a belief that land prices will continue to increase attract investors such as private equity firms and real estate developers who have cash and long-time horizons. About 40 percent of US farm land is rented, and one percent of farm land is sold openly each year.
USDA estimates that 38 million acres of US farm land, about three percent of the 1.2 billion acres of privately owned farm land, is owned by foreigners. Canadians own a third of the 38 million acres and Europeans another third.
The current farm bill, which creates a safety net for farmers and poor Americans, expires in September 2023. Farm bill spending is about $130 billion a year, including 15 percent for farmers and 85 percent to help poor residents to buy food.
The Supplemental Nutrition Assistance Program or SNAP is a focus of debate in the 2023 farm bill. SNAP eligibility was widened during covid, and Republicans want to restrict the duration of SNAP benefits for able-bodied adults. Currently, adults 18-49 can receive SNAP benefits for up to three months in a three-year period.
A White House conference on hunger in September 2022 heard appeals to expand SNAP, which provided benefits to an average 41 million US residents in 2021 at a cost of $114 billion, up from $60 billion in 2019. SNAP benefits can be used to purchase “any food or food product intended for home preparation and human consumption, including seeds and plants that produce food.” Foods defined by the FDA as unhealthy, including “sugary drinks, candy, and unhealthy snacks that are high in sodium, added sugars, and/or saturated fat,” can be purchased using SNAP cards.
CEA. Windset Farms, which began as a four-acre bell pepper greenhouse in British Columbia in 1996, has over 1,000 acres of CEA in BC, CA, and Mexico producing tomatoes, peppers, cucumbers, and lettuce. Windset is known for selling snacking tomatoes and other produce. Mucci Farms is another Canada-based CEA firm that expanded into Ohio in 2017, and now has 75 acres of greenhouses producing tomatoes and cucumbers.
Plenty Unlimited in October 2022 announced that it would open several indoor vertical farms on 120 acres of land near Richmond, Virginia to produce strawberries, leafy greens and tomatoes. Plenty plans to invest $300 million and create 300 jobs.
Morehead, Kentucky-based AppHarvest is running out of money. AppHarvest, which has spent over $640 million since 2018, has about $35 million cash remaining, but needs $100 million to fund its operations over the next year. AppHarvest revised downward its sales for 2022 from a projected $30 million to $15 million, and lost over $80 million on sales of $10 million for the first nine months of 2022.
AppHarvest employs 700 workers at indoor farms in Morehead, Berea and Somerset. Its stock opened at $30 in 2021, and was worth $1 at the end of 2022. Some investors are suing, accusing AppHarvest of fraud after AppHarvest acknowledged that many of the greenhouse tomatoes it provided to Mastronardi did not meet USDA grade 1 standards.
Sales of organic farm commodities topped $11 billion in 2021 from 17,500 certified farms; a third of organic sales were from California’s 3,100 organic farms with 815,000 organic acres. Organic commodity sales included $2.2 billion worth of fruit and berries and $1.9 billion worth of vegetables.
Fish. Some 178 million tons of aquatic animals worth $200 billion were sold in 2020, an average of $1.10 a pound. Half of the fish and seafood were wild fish that were caught, including 80 million tons from marine or ocean waters and 10 million tons from inland waters such as rivers and lakes. China accounted for 15 percent of the wild catch, and Indonesia and Peru combined for the next 15 percent. Aquaculture produced 88 million tons of fish and seafood in 2020, and its share of total fish and seafood is increasing.