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Illustration: Aïda Amer/Axios

America's farmers are living through the worst economic crisis in almost 30 years, driven by low commodity prices, trade war pressures and record flooding.

Why it matters: What's ravaging U.S. farms are part of a trend that's upending economies and regions around the world. That may make this heartland downturn different from the ones before it. As NYT columnist Paul Krugman writes, rural America is being "undermined by powerful economic forces that nobody knows how to stop."

The booming economy isn't touching all corners of the country, and farmers in particular are facing a very different economic reality than the strong economic growth and low unemployment rate elsewhere.

  • The deterioration of rural fortunes can be seen most acutely in Wisconsin, where dairy farms closed at a rate of two per day last year. The state's dairy industry accounts for half of the state’s "critical agricultural sector ... generates $43.4 billion a year in economic activity ... and supports 413,500 jobs or 11.9% of the state’s employment," according to the Wisconsin Policy Forum.
"For a lot of farmers, this has been a gut check. Are we going to tough this thing out, or are we going to get out?"
— fourth-generation dairy farmer Chris Pollack

Downturns in farming are normal and almost expected. The worst in recent history was the farm credit crisis in the 1980s, with low commodity prices and sky-high interest rates. At the height of that crisis, in 1987, there were almost 6,000 farmers who filed for bankruptcy. There were 498 in 2018, while farm profitability was $63 billion — the second lowest in the past ten years.

What is different this time is farmers have seen declining commodity prices for years. And the trade war, which caused less demand for commodities from foreign buyers, has made it more painful (despite $7.7 billion so far in aid from the Trump administration). Extreme weather conditions, like the record flooding seen in the Midwest, have added another layer of uncertainty.

The bottom line, from Steven Deller, a professor of agricultural and applied economics at the University of Wisconsin-Madison: "Farmers are structured to ride these waves out, but when the waves are this long they can't ride that out."

Go deeper

3 hours ago - Politics & Policy

Scoop: Beto plans Texas comeback in governor's race

Former U.S. Rep. Beto O'Rourke speaks during the Georgetown to Austin March for Democracy rally on July 31, 2021, in Austin, Texas. Photo: Brandon Bell/Getty Images

Former Rep. Beto O’Rourke is preparing to run for governor of Texas in 2022, with an announcement expected later this year, Texas political operatives tell Axios.

Why it matters: O'Rourke's entry would give Democrats a high-profile candidate with a national fundraising network to challenge Republican Gov. Greg Abbott — and give O’Rourke, a former three-term congressman from El Paso and 2020 presidential candidate and voting rights activist, a path to a political comeback.

Texas doctor says he performed an abortion in violation of state law

Pro-choice protesters march down Congress Avenue and back to the Texas state capitol in Austin, Texas, in July 2021. Photo: Erich Schlegel/Getty Images

A Texas doctor disclosed in an op-ed in the Washington Post on Saturday that he has performed an abortion in violation of the state's restrictive new abortion law, which effectively bans the procedure after six weeks.

Why it matters: Alan Braid's op-ed is a direct disclosure that will very likely result in legal action, thereby setting it up as a potential test case for how the abortion ban will be litigated, notes the New York Times.

Mike Allen, author of AM
4 hours ago - Technology

Axios interview: Facebook to try for more transparency

Nick Clegg last year. Photo: Matthew Sobocinski/USA Today via Reuters

Nick Clegg, Facebook's vice president of global affairs, tells me the company will try to provide more data to outside researchers to scrutinize the health of activity on Facebook and Instagram, following The Wall Street Journal's brutal look at internal documents.

Driving the news: Clegg didn't say that in his public response to the series. So I called him to push for what Facebook will actually do differently given the new dangers raised by The Journal.