08/30/2026
You might not be surprised to learn that farm bankruptcies and foreclosures have reached a six-year high in 2026 with the outlook for 2027 and beyond not much better. Declining markets for crops such as cotton and peanuts, as well as rising costs for feed, fertilizer, and diesel fuel have driven many farmers to the brink of financial collapse. As costs have risen, net income has declined every year since 2022. Ashley Merritt, Senior Loan Officer for Alabama AG Credit, spoke to the Enterprise Lions Club recently about the challenges farmers are facing.
Ashley grew up on a farm in Coffee County and is proud of the fact that her family continues to operate the farm, following generations of family members who weathered the ever-fickle circumstances involved in farming. She majored in agricultural economics and business at Auburn University and worked for a while for Congressman Terry Everett in Washington, D.C. She returned to her roots in Alabama knowing that she wanted to work in the agricultural field in some way. She started in the appraisal department of Alabama AG Credit and has moved up to the Senior Loan Officer and Assistant Vice-President.
The most important announcement for the agricultural industry from the administration in Washington, D.C., recently was that the President plans to remove tariffs from 300,000 metric tons of imported lean beef for 90 days. He said the countries supplying the beef would sell it at 25 percent below current market prices. Despite a backlash from the cattle industry and some lawmakers, Trump signed the proclamation on Wednesday last week. The cattle industry suspects that the beef will come from Argentina and/or Mexico, but the Secretary of Agriculture Brooke Collins says she does not know where the beef will originate. However, some are concerned about the news in March that China rejected a single 22-ton shipment of beef from one Argentine processing plant after detecting traces of chloramphenicol, an antibiotic banned in the U.S.
Ashley noted that this situation raises concerns on several levels. First, to protect consumers and allow them to choose beef raised in the U.S., Ashley stated that many in the cattle industry would like to see a required label of origin on beef. Currently, beef processors are not required to label their beef, so the consumer in most cases has no idea where the beef comes from. Such labeling would let the buyer know where the meat products originated and where they were processed before being shipped to grocery stores. In addition, the 90-day window is supposed to allow cattle farmers to raise enough beef cattle to bring beef prices down. However, Ashley reported that it takes at least two years for a cattle rancher to raise a calf to be ready for market. And recently the price farmers get for cattle has dropped 39 cents per pound, which amounts to about $475 per calf in the last few months.
In addition to lower prices paid for cattle in the market, the cost of raising cattle has increased. Feed costs have risen as well as fuel costs, as have the prices for land that a potential farmer or rancher might want to purchase to establish a business. Ashley noted that 10 acres of land outside Enterprise sold for about $5,000 an acre until a few years ago, when demand for farmland by non-residents drove the prices up to $8,000-$10,000 and acre, depending on the location and other amenities such as a pond on the land or access to a paved road. Ashley reported that a significant number of people from midwestern and northern states, as well as central Florida, have purchased land in Alabama, seeking a slower lifestyle, less crowding, lower property taxes, and access to hunting land. Some are buying or establishing poultry farms as an investment. The poultry market in Alabama remains strong with restaurant chains such as Chick Fil-A, Zaxby’s, and Kentucky Fried Chicken in the pipeline. The demand for large parcels of land always drives up the price.
To help young, beginning, and small farmers get started, banks like Alabama AG Credit offer special interest rates and incentives. Investing in land, livestock, and equipment is a significant cost to the beginning farmer, so firms like Alabama AG Credit do what they can to facilitate the process. And we desperately need more farmers. Currently 2% of people in the U.S. are providing food for the entire country. Some farmers received income payments as part of the Big Beautiful Bill, but what they really need is access to markets to sell their products. The demand for the high grade of cotton grown in Alabama, for example, has dropped as clothing manufacturers overseas have started using inexpensive synthetic fabrics. The number of children with peanut allergies has resulted in the ever-present peanut butter and jelly sandwiches of the school lunchroom to go by the wayside, which is one reason peanut sales are down 3%. Ashley noted that no one knows yet what this year’s market will look like as farmers prepare to harvest their crops for market.
Volatility is always present in the world of small business and farming. Farmers and cattle ranchers not only fight the rising cost of operating their farms (feed, fuel, pesticides, fertilizer, equipment,), but they also face dwindling prices for their products in the marketplace, as well as uncertainty in the weather conditions. Too much rain, not enough rain, rain at the wrong time of the year, tornados, hurricanes, early or late freezes – are just some of the concerns in the farming industry. And these concerns come with a cost as more farmers declare bankruptcy, resulting in a relentless cycle of declining income amid rising costs and foreign imports that weaken the markets for their products. Ashley left us with one piece of advice: support your local farmers as much as possible, because their business depends on our business.
Pictured is Ashley Merritt of Alabama AG Credit. The Enterprise Lions Club meets weekly on Wednesdays at the Enterprise Farmers’ Market. Lunch is served at 11:30 followed by a brief business meeting and a guest speaker.
