OMAHA (DTN) -- John Halcomb believes crop producers can't keep surviving on emergency aid alone. With farmers facing repeated years of financial losses, he's asking whether policymakers are willing to pursue outside-the-box solutions that actually change the market fundamentals.

At issue is whether Washington can move beyond another round of emergency aid and address the underlying forces driving repeated crop losses. Despite billions of dollars in recent payments, declining farm income, persistent oversupply and weak demand continue to pressure crop producers heading into the 2026 season.

"We keep doing the same thing and nothing's really changing," said Halcomb, who farms along the Kentucky-Tennessee state line. He added, "These payments are necessary, but they don't change the fundamentals. And until we do something that shifts those fundamentals, the numbers don't look good for 2026 either."

Compounding that problem, time is not a luxury given farmers are just a few months away from another spring planting season. Simply hoping for a different outcome is not a strategy for success, he said.

Congress this past year raised reference prices to improve the base commodity safety net, the Agricultural Risk Coverage/Price Loss Coverage (ARC-PLC) programs, which are now projected to pay out roughly $13.5 billion next fall. Congress also provided $10 billion in aid to support 2024 crop losses while the Trump administration last month announced another $12 billion in aid as well under the Farmer Bridge Assistance (FBA) program.

None of that, however, breaks the current cycle of declining net farm income that has dogged producers since 2022. There's an urgency to address crop production and markets before producers face another year of financial losses.

"Decision-makers need a plan in place now, not six or nine months from now, when we're cash-strapped again and asking for another bailout," Halcomb said. "If we keep doing the same thing, we're going to end up right back where we are today."

ADJUSTING ACRES?

Right now, nobody is discussing programs such as the 1980s Payment-in-Kind (PIK) program or evolving the Conservation Reserve Program (CRP) to pull acres of crop production. Both programs played a role in helping farmers survive the 1980s farm crisis.

"If you take $12 billion and tie it to something like $200 an acre, that's 60 million acres," he said. "That's enough to actually move markets."

Looking at USDA's $700 million pilot program for regenerative agriculture, Halcomb questioned whether there is an opportunity to convert some acreage back to pasture and reintegrate livestock into those fields. Such a move could help address crop oversupply while also potentially easing pressure from high beef prices.

"We tore out fences when soybean returns were high. Now rebuilding infrastructure is expensive, and producers are hesitant to buy back into cattle," Halcomb said.

HOW TO ADDRESS OVERPRODUCTION

In a webinar on Thursday sponsored by the Illinois Soybean Association, there were several pre-submitted questions around overproduction of commodity crops.

Nick Paulson, an agricultural finance professor at the University of Illinois, said over-production is a frequent discussion among economists, but also difficult to address in major crop-producing areas.

"The challenge is that any individual farmer, they want to produce," Paulson said. "Kind of the one thing they can sort of control is they want to produce the most bushels that they can -- the most bushels that they can, given the conditions that they have because they're price takers."

At the farm level, farmers can make sure they aren't paying too much for inputs such as dialing back on fertilizer. At the market level, however, higher crop prices often translate into acreage shifts that again drive prices lower.

"To some extent, I do think we have an over-production problem," Paulson noted.

Production grew into marginal areas during the ethanol boom. Yields and production have risen, but demand growth has slowed, Paulson said. At the same time, there are risks in dialing back crop production, especially in highly productive areas.

"We can kind of go too far and kind of think unrealistically about alternatives, particularly right here in the Midwest because, again, if we're going to need corn and soybeans in this country, in this world, this is one of the places we should be producing," Paulson said.

Commodity groups also have an inherent resistance to dialing back crop acreage.

"I don't want to be a wet towel, but you have to be careful about paying people to switch away and not do something," said Caleb Ragland, another Kentucky farmer and immediate past president of the American Soybean Association, in an interview last month with DTN. "Somebody else is liable to just slide in there and start taking up that void. Our friends in South American seem quite willing to jump in and keep producing more and more. I don't know what you do to combat that."

FINANCIAL DIVERSITY AND REGEN AG

At The Executive Program for Agricultural Producers (TEPAP) program this week in San Antonio, instructors highlighted the need for farmers to continue tightening their costs and diversify their income streams. Successful farmers need to consider having three to six sources of revenue, which includes off-farm income as well.

David Kohl, agricultural economist emeritus at Virginia Tech University and a prominent speaker at agricultural events, told TEPAP participants he's concerned about how quickly policymakers are to provide billions of dollars in ad-hoc aid.

"I'm worried about that because it's a magic wand to solve all of our problems," Kohl said.

Kohl also said he sees regenerative agriculture as one of the top trends shaping agriculture, linking soil health to broader health outcomes.

"If you have healthy soil and water -- which China doesn't -- then you have a healthy plant, or a healthy animal, healthy human being and a healthy environment," Kohl said.

BOOSTING BIOFUEL PRODUCTION

Advocating to boost the demand side of the equation, biofuel groups also came out on Wednesday with a letter to leaders in Congress urging lawmakers to pass year-round E15 "as soon as possible" as one way to boost demand. Biofuel groups pointed to the projected record 16.75-billion-bushel corn crop as a need for policies that will help consume the large crop.

"Without new markets, too many bushels will be chasing too few buyers, threatening to deepen the financial strain in rural communities," the biofuel groups wrote.

FARM BUREAU SPEAKER SLATE

A trove of key policymakers will be on the record this coming weekend for their 2026 plans at the American Farm Bureau Federation (AFBF) in Anaheim, California.

On Sunday afternoon, the leaders of the House and Senate agriculture committees will address AFBF members in a general session. USDA Deputy Secretary Stephen Vaden also speaks at the event on Sunday "on how USDA is bridging the gap between Washington policy and the farm gate" while Agriculture Secretary Brooke Rollins addresses Farm Bureau members at the group's closing session on Monday.

Also see, "Better Policies Needed to Boost Farmers' Bottom Lines Beyond Ad-Hoc Aid,"

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Chris Clayton can be reached at Chris.Clayton@dtn.com

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