Arkansas farmers warn the state’s agriculture sector faces a financial crisis, with projected losses of $1.4 billion

According to the Agriculture Council of Arkansas, Arkansas farmers could face widespread bankruptcies by spring 2026 unless the federal government provides emergency support.

Council president Joe Mencer said one in three farms may close if relief is not forthcoming, citing steep declines in commodity prices. Statewide farm losses were estimated at $1.145 billion in mid-August but have since risen to $1.4 billion, driven largely by rice falling to its lowest price in eight years.

“We’re in dire straits. Ag is in turmoil right now,” Mencer said.

The council has submitted letters to the White House and the U.S. Trade Representative requesting that some of the $100 billion in federal tariff collections be redirected to farmers. Executive director Andrew Grobmyer said he and Mencer will travel to Washington next week to press the case with members of Arkansas’s congressional delegation and administration officials.

The downturn is affecting not only farmers but also equipment dealers, crop dusting firms and banks. Mencer said some equipment and parts suppliers have reported sales declines of up to 50%, while banks warn that up to a quarter of current farmers may not qualify for financing in the next season. Smaller rural banks dependent on agriculture are also at risk.

Existing federal measures, such as the Emergency Commodity Assistance Program, have softened losses, but the newly approved budget that raises reference prices will not take effect until the 2026 harvest. “Many farmers in Arkansas won’t be in business next year if something isn’t done,” Grobmyer said.

The council is also calling for incentives to expand renewable fuels markets and for stronger enforcement of “Buy American” provisions. Storage capacity is emerging as another challenge, as low prices in 2024 led many farmers to hold grain back from market. With the 2025 harvest arriving, Mencer warned that large volumes could end up stored outdoors.

The council has additionally raised concerns about competition from Brazil, where lower production costs and Chinese investment in logistics allow for cheaper exports. “Brazil is a key source of pain for American farmers,” Grobmyer said.

Arkansas policymakers could play an important role in advancing support measures, as the state’s congressional delegation holds senior positions on agriculture-related committees. Governor Sarah Sanders has also been meeting with farmers in recent months.

Still, Grobmyer warned that time is short: “There is a true disaster looming on the horizon.”

Source: Talk Business & Politics