K-State economist warns Kansas crop incomes remain under pressure; committee approves draft request for hemp bill

Kansas State University agricultural economist Alan Featherstone told the Committee on Agriculture and Natural Resources on Tuesday that the state’s crop sector remains under stress after two difficult years, while land values and federal relief have cushioned some farm balance sheets.

Featherstone, head of the K-State Department of Agricultural Economics, said “the real struggle right now is on the crop side,” and presented data showing a steep fall in net farm income, higher short-term borrowing and a declining liquidity picture for many Kansas farms.

The presentation matters because crop incomes drive farm family livelihoods across rural Kansas and because state lawmakers who heard the briefing also raised questions about tax, water and labor policy that could affect producers.

Featherstone said the department’s farm-management sample shows average net farm income fell from around $300,000 (in earlier very strong years) to roughly $100,000, with a back-of-envelope estimate near $40,000 for 2024 absent later adjustments. He also reported that roughly one in four Kansas farms had negative net income in 2023, compared with one in 20 in 2021. “We went from 1 out of 20 to 1 out of 4 farms having net negative net income,” he said.

He emphasized that crop insurance payments were a major stabilizer in the recent downturn; his slides estimate the average Kansas farmer received about $180,000 in crop-insurance proceeds over 2022–23 (proceeds minus premium), cushioning market income losses. Featherstone said that without those payments, statewide net farm income would have been near zero for 2023.

Featherstone walked lawmakers through several near-term drivers: falling commodity prices (wheat cash bids that he showed around $4.80 per bushel versus roughly $8.86 two years earlier), elevated but relatively stable interest rates, and lower fertilizer costs that could ease some input pressure. He warned that expected declines in USDA reference prices would reduce crop-insurance guarantees — a roughly 2.1% tightening for corn, about 10% for soybeans and about 20% for wheat in his estimates — which would increase the share of risk farmers bear.

On farm balance sheets, he reported an average debt level around $750,000 per farm and said working capital (current assets minus current liabilities divided by asset level) has fallen from roughly 13–14% to about 11% on his sample. He noted a roughly $50,000 increase in farm debt from the end of 2022 to the end of 2023, concentrated in current liabilities.

Despite income stress, Featherstone described farmland values as a bright spot: three consecutive years of strong appreciation (23%, 14% and 8% in his figures), producing more than a 50% cumulative increase over the period and outpacing inflation on a wealth basis. He cautioned land is an asset, not cash income, and expected some softening in 2025.

Featherstone briefed the committee on federal relief he called the American Relief Act of 2025 (as presented in his slides), estimating an average payment near $45,000 per Kansas farm based on 2023 crop allocations; he said that payment, arriving in 2025, would materially improve family cashflow even if the funds are applied to different tax years.

Lawmakers asked questions about the role of state policy. Featherstone told the committee that use-value property tax appraisal and water policy (especially for irrigated acres) are among state levers that matter locally, while federal farm policy and global markets typically have the largest short-term effect on farm income. He also discussed labor and visa issues for producers, the effect of avian influenza on poultry and egg prices, and the value of local markets for specialty and small-acreage producers.

During the meeting, a committee member requested a draft of 25RS 0377 regarding hemp in Kansas. The chair asked, “Any objections?” and, after “seeing none,” the chair said the request was approved. The committee also scheduled a follow-up meeting for Tuesday that will include an update on highly pathogenic avian influenza from the state veterinarian, Dr. Justin Smith.

Votes at a glance: - Request draft of 25RS 0377 (hemp in Kansas): motion to request draft made on the record; chair recorded no objections and said the request was approved (no roll-call tally recorded).

The presentation and discussion lasted roughly the typical hour-long committee slot and included several lawmakers from both east and west Kansas districts; Featherstone said 2024 is likely to remain difficult for crop farms and that 2025 would improve only if commodity prices recover or if federal interventions provide additional support.