Federal and state cuts to child care subsidies leave lower-income Americans with few options

Child care centers can be high-labor, low-profit businesses.
(Photo by McKinley Hess via Hechinger Report)

To prepare for federal budget cuts, some states have opted to slash their early learning programs. The overall reductions to child care subsidies have left lower-income parents struggling with higher co-payments and fewer slots, while child care providers face unexpected pay reductions and delayed payments.

"Colorado, Maryland and New Jersey recently stopped accepting new families into their child care assistance programs," reports Jackie Mader of The Hechinger Report, which covers education. Indiana and Arkansas announced lower reimbursement rates for child care providers serving lower-income households.

Many U.S. parents with infants and preschoolers already contend with the scarcity and high cost of child care nationwide, but the difficulties are harder on poorer Americans. Mader explains, "Experts warn this trend in some states of scaling back early childhood investments is widening an existing nationwide disparity in the availability of affordable, high-quality child care."

Reduced and delayed payments to child care providers could further shrink the number of child care slots, which already don't meet current needs. Mader reports, "Child care programs are expensive to run and, with limited public support, providers rely heavily on tuition from parents to pay their bills."

Daniel Hains, the chief policy officer at the D.C.-based National Association for the Education of Young Children, told Mader, "Almost every state is facing a very, very, very significant pullback of federal dollars. . . . It’s going to result in lower quality care for children, or it’s going to result in families pulling back from the workforce and facing greater economic insecurity."

Montana small-business owner touts restoration, permanence of 2017 tax laws

Robert Majerus

Tax breaks and job reforms from President Donald Trump's first term helped jump-start and strengthen rural businesses, but many of those provisions already have expired or will end in 2025 unless Congress acts soon, writes Robert Majerus in his opinion for InsideSources. "Many of the 2017 tax law’s most essential cuts and deductions run out at the end of the year, and others already need to be restored."

Provisions that already have been phased out and need restoration include the "20% qualified business income deduction, which many small businesses have benefited from, as well as the immediate expensing of research and development and equipment," Majerus explains. "For farmers, the ability to expense these investments in the same year that they are made and brought online makes a huge difference, supporting innovation in the agricultural economy."

One of the most important changes the Tax Cuts and Jobs Act made was to reduce the "corporate tax rate from 35% to 21%, bringing the tax burden on U.S. businesses more in line with other countries," Majerus points out. "The TCJA provided more incentives for many small businesses to restructure themselves as C-corporations to take advantage of the lower tax rates."

To maintain profits and support continued small business growth, it is "critical for lawmakers to avoid calls to increase the corporate tax rate to help pay for the much-needed extensions of the Tax Cuts and Jobs Act’s economy-growing tax cuts," Majerus explains. "Reverting to a high corporate tax rate would be akin to raising taxes on Main Street and rural businesses that struggle to keep their doors open after years of high inflation."

Part of President Trump's presidential campaign included promises to "revitalize middle America," Majerus writes. "Now, these small businesses and communities that were helped in 2017 are the ones that will see the most gains wiped out if these tax cuts are not extended and made permanent."

The House has passed its support for reinstating and extending TCJA provisions. Majerus adds, "It’s time for the Senate to move forward while acknowledging the time limit businesses have before these expiring tax cuts go into effect at the end of the year. Time is short."

Robert Majerus is a member of the Community Business Alliance and a small-business owner in Montana.

HHS fires staff dedicated to helping low-income Americans pay for utilities: 'There's nobody left to do anything'

About 17% of U.S. households spend more than one-
tenth of their income on energy. (Adobe Stock photo)

A recent staffing purge of Low Income Home Energy Assistance Program employees at the Department of Health and Human Services may leave millions of low-income Americans unable to pay their utility bills. "The Trump administration abruptly laid off the entire staff running a $4.1 billion program to help low-income households across the United States pay their heating and cooling bills," reports Brad Plumer of The New York Times. The loss of assistance could burden millions of poorer rural residents who already spend a disproportionate amount of their incomes on energy bills when compared to their more urban counterparts.

It's unclear how a program that routinely helps roughly 6.1 million Americans can continue to offer assistance without any employees to administer payments. Mark Wolfe, executive director of the National Energy Assistance Directors Association, which works with states to secure funding from the program, told Plumer, “They fired everybody. There’s nobody left to do anything. Either this was incredibly sloppy, or they intend to kill the program altogether.”

While most of the 2025 funds have been paid, a remaining $378 million hangs in the balance. Plumer explains, "Congress had approved $4.1 billion for the program for fiscal year 2025, and about 90% of that money had already been sent to states in October to help households struggling with high heating costs." The $378 million could help lower-income residents pay for summer air-conditioning bills, but LIHEAP disbursements seem unlikely without program staffing.

The firings angered several Democratic lawmakers. Plumer reports, "Representative Jared Golden, a Democrat who represents a largely rural district in Maine that voted for President Trump, wrote in a social media post, 'What efficiency is achieved by firing everyone in Maine whose job is to help Mainers afford heating oil when it’s cold?'" Senator Edward Markey, a Massachusetts Democrat, referred to the LIHEAP staff eliminations as "sabotage."

A study published last year in The Economic Journal "found that roughly 17% of U.S. households spend more than one-tenth of their income on energy, a threshold that researchers often define as a 'severe' energy burden," Plumer adds. "The study also found a strong relationship between energy affordability and winter mortality."

Not enough child care spots pushes states to help care centers expand; some emphasis is on rural needs.

Helping child care centers expand means more
parents can stay on the job. (Adobe Stock photo)

The lack of available and affordable child care keeps many parents -- mostly women -- out of the U.S. workforce. The need for more spots has pushed state lawmakers to use novel strategies to help child care centers expand.

"Nationally, more than half of all Americans live in 'child care deserts,' and the need for child care is especially great among . . . low and middle-income families, families of color and families living in rural areas," reports Maggie Clark of Stateline. "A child care desert is a place where there are more than three children for every regulated child care spot."

The child care conundrum isn't just an issue for parents. The problem "costs the U.S. economy roughly $122 billion each year in lost earnings, productivity and revenue," Clark explains. "To create more child care slots and reduce prices, lawmakers are increasingly using economic development strategies to help child care businesses expand, similar to the support they’ve offered to attract and expand manufacturing facilities, technology startups or other types of businesses."

Advocates and lawmakers are particularly focused on addressing child care shortages in rural areas. Clark explains, "This year, Oregon is awarding its first batch of $50 million in grants and loans for new construction, expansion and renovation for child care businesses, with priority for child care providers in rural areas."

Lawmakers in Colorado, Nebraska, Oregon and Vermont had "local and state zoning regulations reviewed," Clark reports. They also "set up help centers where child care business owners can get help with navigating permitting and other business rules so that they can expand their businesses and care for more children, which will help more parents stay in the workforce."

States that are working to support child care businesses with infrastructure offerings that other sectors receive "send a powerful message that child care businesses and the people who operate them are valuable to their communities and economies," Clark writes.

Erin Roche, Vermont director of First Children’s Finance, which is helping the state administer its child care infrastructure grant program, told Clark, "It’s a lot about changing our cultural values of thinking of [child care centers] as businesses, and not just something little that mostly women do on the side."

When poverty is measured differently, a new and surprisingly poorer American picture emerges

Many Americans may look to the federal poverty rate as a way to measure how many U.S. citizens are living in need. Unfortunately, that snapshot is "just the tip of the iceberg," writes Jeffrey C. Fuhrer of Brookings in his blog. Fuhrer outlines why the the poverty rate, which doesn't vary from place to place, is a "woefully incomplete measure of economic need. A much more relevant benchmark is the cost of a basket of basic necessities. That benchmark, unlike the poverty threshold, varies dramatically by geography, as housing and other costs vary substantially from county to county. The cost of necessities far exceeds the poverty level for every family category in every county in the country."

When the ability of a family's income to meet basic needs is used to calculate how many American budgets fall short, a much different picture emerges. For a "shockingly high proportion of families, total family resources do not cover the expenses for these necessities. And that proportion rises significantly for families of color," Fuhrer adds. "Forty-three percent of all families in the U.S. fall short of meeting basic needs. And the legacy of institutional racism jumps out of these statistics: Across all family structures, 59% and 66% of Black and Hispanic families, respectively, have resources that fall short of basic family budgets, versus 37% of white families."

How do families manage to make do without? "As the interviewees in my recent book, The Myth That Made Us, attest, they use a variety of tactics to cope with life on or near the edge. To be sure, they scrimp on some necessities. Families can avoid spending on preventative health care, home maintenance (for the minority who own homes), auto maintenance and other necessary expenditures that can be deferred. They go into debt," Fuhrer explains. "All of these decisions bear important longer-term consequences. As a leading example, non-payment of rent often leads to eviction and the endless trauma that accompanies it."

By the numbers, the U.S. is the wealthiest country in the world, but many Americans are not sharing in that legacy. Fuhrer writes, "The huge numbers of families with low incomes, measured not relative to the poverty line but to quite conservative budgets, is staggering. . . "

To read Fuhrer's complete blog posting including supporting data and graphs, click here.

Americans haven't spent this much of their money on food in decades, and relief is not coming anytime soon

Wall Street Journal graph, from Department of Agriculture data

If you feel like your grocery bill is gobbling up more of your paycheck, it's not your imagination. "The last time Americans spent this much of their money on food, George H.W. Bush was in office and "Terminator 2: Judgment Day" was in theaters," report Jesse Newman and Heather Haddon of The Wall Street Journal. "Eating continues to cost more, even as overall inflation has eased from the blistering pace consumers endured throughout much of 2022 and 2023. Prices at restaurants and other eateries were up 5.1% last month compared with January 2023, while grocery costs increased 1.2% during the same period, Labor Department data show."

Why is this happening, and when will it end? Food costs increased as inflation spiked up prices across the board, but even as other costs ease, food costs will likely keep their post-inflation era price tags. Steve Cahillane, chief executive of snack giant Kellanova, told the Journal, "If you look historically after periods of inflation, there's really no period you could point to where [food] prices go back down. They tend to be sticky."

To lessen pocketbook drain, "Many diners have said they are going out less frequently or skipping appetizers, while buying cheaper store brands more frequently at supermarkets and seeking out promotions or deals offered via apps," Newman and Haddon write.

Still, many food companies are seeing profits dip based on higher commodity prices for sugar, tomatoes and cocoa and increased labor costs. The Journal reports, "Companies are set to pay more for staffing after 22 states lifted the minimum wage for hourly workers in January." 

One kernel of good news is that some peak prices may come down. Newman and Haddon explain, "Although it is rare for food prices to retreat, it is also unusual for prices to skyrocket as much as they have in recent years, said TD Cowen analyst Robert Moskow. He said he expects grocery prices to decline for a period this year as food makers come under pressure from consumers and retailers."

Selling solar in coal country begins with local trust and an understanding of the history of those communities

Overcoming solar opposition begins with understanding
coal's history. (Photo by Gabriel Fibz, Unsplash)

Selling solar in coal country might sound like a tall order; however, solar advocates in southwestern Virginia have built a cooperative system of local support for solar. "In 2016, a coalition of businesses, nonprofits, colleges, local governments, and citizens launched the Solar Workgroup of Southwest Virginia, which collaborates with Secure Solar Futures," reports Hannah Wilson-Black for Grist. "It includes experts in every aspect of the green transition, from community organizers who tell neighbors about the benefits of solar to legal experts who propose legislation."

The group's plan began with an understanding of the history and outlook of coal communities and why they might not welcome solar. Emma Kelly, who grew up in eastern Kentucky and now leads the Solar Workgroup's community outreach, told Wilson-Black: "I’m from the coalfields. And you have to understand. Coal mining is not just a job. The coal industry is not just an employer. It’s not like Walmart. [Coal companies] built towns, they built schools, they built churches, they made their own money. You cannot really overestimate the amount of domination they had over these social and economic systems.”

"Because residents of southwest Virginia may see solar as helping accelerate the loss of coal jobs, she and Matt McFadden from Secure Solar Futures consider their being locals an important component of building confidence in, and support for, the technology," Wilson-Black reports. "More important, though, is the fact that local solar advocates and companies like Secure Solar Futures make it clear that their mission goes beyond profit. 'I don’t get anything out of this except a sense of fulfillment,' said Kelly, who became involved in solar advocacy in 2022 after learning, to her surprise, of solar’s potential in the coalfields."

Considering the region’s history, and overall distrust of energy companies, Kelly and other solar advocates in southwestern Virginia "said being local, proving solar’s benefits, and building a coalition have been key to ensuring the technology’s success in the face of cultural and political opposition," Wilson-Black writes. The group has made progess, which is on display in the coalfield community of Whitesburg, Kentucky, where "a solar pavilion and rooftop at the arts education center Appalshop has attracted curious neighbors, said Kathleen Byrne, the center’s development director."

Local focus and trust building continue to help solar succeed in the region. "McFadden said demonstrating the technology’s feasibility through community-focused projects like the 12 school installations his company is handling has changed perceptions in the area," Wilson-Black writes. "Hiring locals to install and maintain the photovoltaic panels is key, too. In 2022, Secure Solar Futures started an annual apprenticeship program that trains local high schoolers to do everything from wiring arrays to the physical heavywork of carrying and arranging panels, and pays them $17 an hour. This tangible example of a solar operation employing community members has been part of 'the proof in the pudding,' McFadden said."

Kids who grew up poor in rural areas fair better later in life than urban kids, a study shows. Researchers look at why.

Two-parent households may give rural kids an
advantage. (Photo by Arseny Togulev, Unsplash)

Researchers looked at income outcomes for children who grew up poor in rural areas compared to their urban counterparts and found a surprising difference: rural children tended to earn more later in life, reports Sarah Melotte of The Daily Yonder. "Authors of a new study on social mobility found rural children born in poverty gain higher incomes as adults compared to low-income urban children. . . . Factors like community trust, social capital, and the rate of two-parent households help explain more upward social mobility, or positive change in one's economic status, among rural children born into poverty, according to a 2023 study." 

The study's lead researcher, Dylan Connor, an associate professor at Arizona State University, told Melotte, "People have noticed this rural advantage but haven't really been able to explain it. The conventional thing that people have said is that conditions are so bad in these rural places that kids grow up and leave. . . . Rural places actually seem quite favorable compared to urban places." Melotte adds, "In response to this trend, Connor and other researchers think it's important to look at places that are still delivering opportunity and to try to determine what characteristics of those places make them favorable."

A defining advantage that rural children have is more two-parent families. "Connor and his colleagues found that rural children in poverty achieved higher incomes as adults than urban children in poverty did. One explanation is that a greater share of rural children are born into two-parent households," Melotte explains. "The rural advantage doesn't just apply to the people who grew up in a rural community but moved to a city as adults. The study demonstrated that both low-income children who remained in a rural community through adulthood and those who left experienced an income advantage compared to their urban-born peers."

The study also revealed a rural bias that favored male income and opportunities. "On some measures of income attainment, girls born in low-income households don’t benefit from the same rural advantage as boys," Melotte reports. "With personal income – which refers to the incomes of each adult member of the household, not their combined incomes – women earned significantly less than their male peers. . . . Disparities in personal income between men and women are greater in rural areas than they are in urban ones." Connor told Melotte: "Women actually seem to benefit from growing up in a city in terms of pursuing their own careers and so on.”

Finally Friday quick hits: Top rural restaurants, the 70-ingredient sandwich; farmer side hustles, Snoopy therapy

Amano’s in Caldwell, Idaho. L.A. Birria Tacos, left,
(braised beef & quesillo); right: Chef Salvador Alamilla

What's for dinner tonight? Consider one of these gems, or take a peek at their menus for inspiration. Here's the 13 Best Restaurants in Rural America 2023.

To help fill in money gaps, many farmers find creative ways to bring in additional income. "Many turn to the online resale market to buy items for cheaper prices or a place to sell quality items for extra money when economic times are uncertain," reports Marion Kirkpatrick of RFD-TV News, which covers rural America. "While it takes hard work and dedication to pick up this 'side hustle,' it can be a great outlet for farmers and rural Americans to help make ends meet." Here are six things farmers can sell online.

While research into beef consumption isn't always encouraging for meat eaters, it can be good to stay informed on what science is telling us now. Even if we're still going to have steak tonight.

Illustration by TCD, Prod.DB, Alamy via The Atlantic

If you're overwhelmed by extreme weather, war, corruption, elections and life in general, reading Snoopy can help, advises Elise Hannum of The Atlantic. "Snoopy can’t help but feel overwhelmed in a tumultuous world. Sound familiar?"

As the world’s beaches and oceans have become one giant ashtray, research has accelerated on what many are calling a global crisis: cigarette butts, reports Jude Isabella of Hakai magazine. "Researchers have published a number of studies in 2023 on the problem of cigarette butt littering, from a review of studies on environmental contamination to a global analysis of the crisis. In fact, the number of studies is on the rise, with researchers publishing twice as many in 2022 compared with 2021."

Yes, it’s back. It always comes back. (McDonald's photo)

The strange and surprising journey of McDonald's McRib begins in a Nebraska lab and ends with a 70-ingredient sandwich. "Roger Mandigo is an emeritus University of Nebraska animal science professor credited with the technology that made the McRib possible," reports Peggy Lowe of NPR. "And here's its story, straight from the meat scientist's mouth." For fans, the McRib is coming back to select restaurants in November 2023, reports Mary Walrath-Holdridge of USA Today.

In a county with glaring wealth disparities, one reporter looks at how rural is defined and where higher education fits

The Grand Teton Mountains separate Teton County, Wyoming
from Teton County, Idaho. (Photo by Leslie Cross/Unsplash)

About 30 miles and a mountain pass separate Teton County, Wyoming, from Teton County, Idaho, but the county is divided by more than geography: Teton County, Wyoming, has a whopping average $318,297 per-capita income, and Teton County, Idaho, claims a $35,000 average. Higher education reporter Nick Fouriezos of The Daily Yonder discusses three things he learned while visiting the Teton Counties.

Fouriezos writes, "I encourage you to read the piece, which deals with a number of issues being felt across rural America, from how educational institutions and state governments are trying to address workforce gaps to deepening concerns about affordable housing."

When making choices about rural areas, go where the people go. "Earlier this year, the College of Eastern Idaho teamed up with the nonprofit Education Design Lab. . . to design, test, and scale rural postsecondary programs. The college wanted to get feedback from residents of Driggs, a mostly working-class rural town in Teton County, Idaho, which is quickly seeing its own costs rise as people move there while leaving behind its neighboring counterpart in Wyoming.

"To start, the education nonprofit and the college conducted interviews at the local farmer's market. . . . But after spending more time talking to educators in the area, they realized that anybody who could afford to be buying fresh veggies at 2 p.m. on a Thursday probably wasn't their target demographic.

"They shifted gears, doing their next round of interviews while handing out gift cards at the Broulim's grocery store, a popular lunch haunt for construction and service workers in the Driggs area. . . . That moment was a good reminder: If you really want to hear from rural America, don't rely on outliers of the rural experience.

Amid shifting costs, rural communities are feeling pressure to change. Almost every year, Powell Symons says she gets approached by the Jackson Hole Chamber of Commerce to bring the Teton Valley Balloon Rally from Idaho over to the Wyoming side. Even though the offer has become more tempting as the region's disparities deepen, she has resisted so far. . . .To Powell Symons, it would end a four-decade tradition here in Driggs, one that draws Idahoans from all over the state each year. And having had the chance to share their love for those balloons personally, that would be a tragedy."

Higher ed can't attract students who don't feel like they have choices. "For a time, Luna dreamed of going to cosmetology school. Then she could work at a salon, doing the face masks and other lux cleansing rituals people in Jackson are willing to pay so much more money for than in Driggs. . . . Now, those plans seem far off. She has to make payments on the truck and to fix its transmission. She has to pay her share of rent on the mobile home she shares with her uncle and her grandma, who is now 82 and needs just as much help as ever.

"These are the types of decisions many rural students face across the country. It's not just whether a degree will pay off four years from now, or over a lifetime. . . It's more often about whether they can get by today. Not just for themselves, but for those who rely upon them."

Is the U.S. inching toward recession? Ag economists weigh in on warning signs

Graphic by Lindsey Pound, Farm Journal

Over the past two years, many economists and business leaders have warned that an economic downturn is on the horizon. "While ag economists continue to be at odds when it comes to the likelihood of a recession in the United States, there are also concerns about economic woes around the globe," reports Tyne Morgan of Farm Journal. "Some economists doubt the United States' biggest importers will be able to avoid a recession over the next 18 months."

Ag Economists' Monthly Monitor has kept tabs on U.S. trade partners' ongoing efforts to prevent  a recession. "A survey of nearly 60 ag economists from across the country were asked if the United States' major importers will avoid a recession over the next 18 months," Morgan writes. "Of those who answered the question, nine said 'yes,' but eight responded 'no.' Four remained unsure. . . .when asked to explain their reasoning, the answers revealed a host of concerns, including labor shortages, risks in China and Europe, and the strength of the U.S. dollar."

The U.S. economy has proved robust, but many economists "point to red flags that continue to flash caution signs moving forward," Morgan explains. "One is the fact credit card debt is climbing at a time when inflation continues to eat away at consumers' spending power." 

September's Monitor conducted an anonymous survey asking economists to name the top three indicators they use when considering possible recession. Their replies included:

"I follow Fed monetary actions, interest rates and unemployment levels."

"I follow unemployment rate, hourly wage rate and consumer prices."

"I don't think the Fed can get inflation down to the 2% mandate without a recession if it holds to that mandate."

"Employment growth remains fairly strong, and the U.S. unemployment rate remains historically low. As long as there is not a sizable decline in demand for labor (which is what I believe), the U.S. should, at worst, have a shallow and relatively short recession."

"Ag economists' view on the overall ag economy is also starting to erode," Morgan reports. "The September Monitor shows lower commodity prices, concerns about demand, and a negative outlook for China's economy, all contributing to the changing views, even as the cattle herd and U.S. corn and soybean crops continue to shrink." 

The loss of timber jobs left this county awash in poverty, violence and tree poaching

The Guardian illustration

Illegal tree harvesting is not ordinary in some parts, but it can become a person's primary source of income in lands where national parks and environmental concerns have ebbed out timbering employment. "Timber poaching exists at a confluence of this rural economic decline and environmental policy," reports Lyndsie Bourgon of The Guardian. "A number of poachers in Orick, California, detailed their motivations as an alchemy of poverty, lack of opportunity, drug misuse and resentment toward national parks, the federal government and environmentalists. . . . It's a snapshot of how rural communities across North America face de-industrialization, the ways they have failed to transition away from those dependent economies, and the people who remain rooted through the change."

Bourgon writes about Danny Garcia, a man who grew up in Orick, a Humbolt County town along California's Redwood Coast. Garcia was born into a beleaguered rural economy and became a tree poacher. Bourgon writes, "Redwoods National Park was instituted in the 1960s, then expanded in the 1970s, and in the late 20th century, the town was not spared from the Pacific north-west's timber wars. Orick's logging industry began to shrink, then all but disappeared as mills and lumber companies closed or moved." 

Alongside life in rural Orick, Garcia lived with the violence and trauma that often accompanies poverty. "By the early 1990s, Garcia's mother had died by suicide. His grandfather and many of his uncles were killed in logging accidents, traffic accidents and by drowning. Some spent time in prison; some used hard drugs. One of his aunts told me about the assaults she and her friends had experienced in the town from husbands, boyfriends, and other family members."

The sociologist Jennifer Sherman, a professor at Washington State University, studies unemployment's effects on rural communities in California and Washington. She told Bourgon, "Domestic violence is a huge part of my work. It seems to accompany poverty wherever poverty goes." Bourgon reports: "Humboldt leads California in violence against women; in particular, Indigenous women (close to 50% of Indigenous women in Humboldt are victims of domestic violence, according to Humboldt county domestic violence services). . . . Humboldt County averages 50% more domestic violence-related police calls per capita than the rest of California, and of those, close to half include a weapon."

Dollar store mania: Six in and near a town of 1,400

Daily Mail map

A Dollar General store opened in Olive Hill, Kentucky, pop. 1,400, 50 years ago. Since then five more dollar stores have opened, all but one on the same road, U.S. 60, reports Keith Griffith for the Daily Mail. "In the Appalachian foothills, the town has two Family Dollar locations and four Dollar General stores. . . . leaving some residents wondering: Why so many dollar stores? Dollar General, like other major retailers, uses an algorithm to suggest new store locations. . . . Still, residents greet the recent explosion of dollar stores with a mixture of amusement and bewilderment."

"Just over the past couple years they’ve really started popping up," Jeremy Wells, editor of the Carter County Times, the local weekly, told Griffith. "People aren’t really upset by them, but they are a little puzzled." Griffith writes, "Over the past decade, dollar stores have been the fastest-growing food retailers by share of household expenditure, with growth in rural areas more than doubling, according to a recent study. . . . But critics noted health concerns about their food offerings, which skew toward high-calorie, ultra-processed packaged foods. . . . Dollar General has responded to this criticism by launching fresh produce sections in thousands of its stores, including several in Olive Hill." 

This Dollar General is also known as the ‘Olive Hill
Walmart.' (Photo by Keith Griffith, Daily Mail.com)

Christopher D. Merrett, director of the Illinois Institute for Rural Affairs at Western Illinois University, told Griffith that in some cases, a new dollar store can be a boon to rural areas where local businesses have shuttered; however, "If you are a small town that does have an existing grocery store, it's more complicated. It's not unilaterally positive. . . . We don’t want it to be a zero sum game, where a new store takes business from a longstanding locally owned business. It could force that existing grocery store to close."

Griffith notes, "Dollar General has expanded aggressively in rural areas and small towns, typically seeking out areas that are at least 20 miles from the nearest Walmart or major grocery chain. . . . its biggest footprint is in Southern states, and roughly 75% of Dollar General stores are in towns with populations under 20,000. . . . ‘We serve millions of Americans who may not have affordable food options nearby,’ Dollar General said in a statement."

The first Dollar General in the county was a "totally different experience," Wells said, with "a limited selection of mostly low-end dry goods," Griffith writes. "Olive Hill residents jokingly refer to the Dollar General closest to downtown as the ‘Olive Hill Walmart’ due to its wide variety of goods, including a small produce section stocked with fruits and vegetables." The town also has a Sav-A-Lot discount grocery. It is the birthplace of the late Tom T. Hall, country songwriter.

Opinion: Organic farms are paying off as financiers provide the land and tenant farmers cultivate the crops

A twist on organic farming is blooming into profits, opines Peter Coy of The New York Times. The set-up looks like this: Garrett Mussi, a farmer in California's San Joaquin Valley, "doesn’t own any of the acres he tends so carefully. He is a tenant farmer. The owner of the land is Farmland L.P., an investment fund that buys farmland and readies it for certification as organic by the Department of Agriculture: using pesticides sparingly, and only the least harmful kinds; minimizing erosion; sequestering carbon in the soil; rotating crops regularly and providing habitats for butterflies, bees and other pollinators. Some organic farmers use ladybugs to eat aphids and owls to eat rodents. . . . What we have here is finance meeting farming and doing good, not evil."

NYT illustration; images by VectorGoods and Bablab/Getty Images

Federal crop insurance "incentivizes farmers to stick with one crop — typically industrial corn or soybeans — and make heavy use of fertilizers and pesticides," Coy writes. “Companies such as Farmland are thinking further ahead while still keeping financial principles and profit in mind. Farmland bought one 4,000-acre farm that grew mainly low-value alfalfa, feed corn and processing tomatoes, assessed the ideal uses for different sections based on soil conditions and other factors, and chose to go with blueberries, olives, nuts, garden vegetables and pasture in various areas — all grown without heavy-duty pesticides." Craig Wichner, the founder and managing partner of Farmland, told Coy: “At a very simple level, our business model is based on taking high-quality land that’s growing low-value crops and converting it to higher-value crops.”

Coy writes: "Going organic isn’t cheap. Farmland has to stop using industrial-strength pesticides and fertilizers on land for three years before it can meet the Department of Agriculture’s standard for organic farming. . . . The upside is that consumers are willing to pay more for organically grown food. . . . For organic farming to catch on, young people will have to embrace it. But most can’t afford to because of the sky-high cost of agricultural land. . . . It’s as if tech start-ups had to buy their own office buildings before they could go into business, Wichner told Coy. Investors in companies such as Farmland are essentially supplying farmers with the 'office buildings' they need to work their food-producing magic."

Pandemic gave workers 2 weeks sick leave; now many are back to work with no paid leave and few options for care

Photo by Aron Visuals on Unsplash

For many American workers, the days of two weeks paid sick leave, mandated in the first year of the pandemic, have ended. They have been replaced with hard decisions, which weigh disproportionately on rural residents, reports Jazmin Orozco Rodriguez of Kaiser Health News: "Workers in rural areas face even more challenges than those in cities, including greater distances to hospitals and fewer medical providers, exacerbating health and income disparities. Companies in rural areas may be less likely to voluntarily offer the benefit because they tend to be smaller and there are fewer employers for workers to choose from."

Some jurisdictions have implemented time-off laws, but "Most states where more than 20% of the population is rural haven’t, leaving workers vulnerable," Rodriguez writes. "Vermont [the most rural state by population, 65%] and New Mexico [the 29th most rural, at 25.5%] are the only states with a sizable rural population that have passed laws requiring some form of paid sick leave. . . . Experts say the gaps in paid leave requirements mean workers in rural areas often struggle to care for themselves or loved ones while making ends meet."

The two weeks of sick leave mandated by the 2020 Families First Coronavirus Response Act ended at the end of that year, and its "expiration left workers to rely on the Family and Medical Leave Act of 1993, which requires companies with 50 or more employees to provide them with up to 12 weeks of unpaid time off to care for themselves or family members. But many workers can’t afford to go that long without pay," Rodriguez reports. "Advocates say a stronger federal policy guaranteeing and protecting paid sick and family leave would mean workers wouldn’t have to choose between pushing through illness at work or losing income or jobs."

Rural Americans support paid sick and family leave, "according to the National Partnership for Women & Families, which found in 2020 polling that 80% of rural voters supported a permanent paid family and medical leave program, allowing people to take time off from work to care for children or other family members," Rodriguez writes. "But lawmakers have been divided on creating a national policy, with opponents worrying that requiring paid leave would be too big a financial burden for small or struggling businesses."

San Francisco was the first city to order paid sick leave. Rodriguez reports: "Since then, 14 states, the District of Columbia, and 20 other cities or counties have done so. Two other states, Nevada and Maine [the second most rural state, at 61% of population], have adopted general paid time off laws that provide time that can be used for illness. . . . The patchwork of laws nationwide leaves workers in several mostly rural states — places like Montana [46.6%], South Dakota [42.8%], and West Virginia [55%] . . . without mandated paid sick and family leave."

Consumer finances in rural Appalachia have fallen even farther behind the rest of the nation in the last 20 years

A new report from the Consumer Financial Protection Bureau examines the financial challenges faced by residents of rural counties in Appalachia. "On average, rural Appalachians earn less than other rural people across the country and significantly less than non-rural consumers," CFPB says.

Strikingly, the income gap is growing: "While the median rural Appalachian household income was 89% of the national median in 1999, it was only 69% of the national median in 2020." 

A possible contributing factor: "The share of rural Appalachians attending at least some college lies far below the national average—53% compared to 67% nationally."

Appalachians also have far less access to high-speed internet, says the report: "Only 76% of households in rural Appalachia have access to broadband, compared to 85% of households nationally. Eighteen counties—overwhelmingly in rural areas—lag with rates below 60%."

Consumer Financial Protection Bureau map, adapted by The Rural Blog

Credit-card statistics suggest that Appalachians from the poorest rural counties, those classified as "persistent poverty counties," are less likely to qualify for a card, and that those who do have a card are less likely to be able to pay it off, even though they tend to have lower than average balances on their cards. Appalachians in persistent-poverty counties were less likely to have a credit card and carried a lower average credit card balance than other rural Appalachians, other rural non-Appalachians, or the nationwide average. But those in rural persistent-poverty counties who did have a credit card were more likely to use it than those in other groups, and were more more likely to have delinquent debt on at least one credit card.

"Rural Appalachians are more likely to have a subprime or deep subprime credit score compared to all consumers nationally and consumers in the rest of rural America, which typically leads to a higher cost of credit," the report says. "Rural Appalachians are also more likely than consumers in other parts of the country to have medical debt collections on their credit record."

Net farm income predicted to be highest in eight years, with 18% increase in crop and livestock receipts over 2020

Agriculture Department charts adapted by The Rural Blog. F=forecast. Click the image to enlarge it.

Farmers' net income is predicted to hit $113 billion in 2021, the highest figure since 2013, says the Agriculture Department's Economic Research Service's newly updated Farm Income Forecast. 

One-third of net farm income will come from government aid, which is smaller than last year's share but still above average. And high commodity prices mean farmers are predicted to bring in 18% more in crop and livestock receipts than in 2020.

You can read the full report here, but below are some of the highlights:

• Net farm income, a broad measure of profits, is estimated to increase by $15.5 billion (19.6%) from 2019 to 2020, and is forecast to increase by another $18.5 billion (19.5%) from 2020 to 2021.
• Net farm income is forecast to be at $113.0 billion in 2021, its highest level since 2013 and 20% above its 2000-2020 average of $93.9 billion in inflation-adjusted dollars.
• Net cash farm income, a more precise measure of farm profits that includes government payments, is expected to hit $134.7 billion in 2021, an increase of $19.8 billion (17.2%) over 2020 in inflation-adjusted dollars.
• At $134.7 billion, net cash farm income would reach its highest level since 2014, and would be 19% above its 2000-2020 inflation-adjusted average of $111.4 billion.
• Average net cash farm income per farm business is predicted to increase by $10,000 (11.9%) to $93,700. 
• Average net cash farm income is expected to increase in 2021 for farm businesses in the Heartland, Northern Great Plains, Prairie Gateway, Eastern Uplands, and Mississippi Portal, but expected to decline in the Northern Crescent, Southern Seaboard, Basin and Range, and Fruitful Rim.
• Farms specializing in hogs and corn are predicted to see the largest average net farm income growth in 2021, while farms specializing in dairy, cotton, and specialty crops are expected to see a decline.
• Crop and livestock receipts are expected to hit $421.5 billion, a $64.3 billion (18%) increase over 2020. 
• Total crop receipts are forecast to increase by $37.9 billion, or 19.7%, from 2020.
• Total animal and animal product receipts are forecast to increase by $26.5 billion, or 16.0%, from 2020.
• Higher commodity prices are driving mosts of that trend. Of that increase, $36 billion would come from corn and soybeans, $9.4 billion from hogs, $8.3 billion from cattle, and $7.3 billion from broilers. Corn, soybeans, hogs, cattle, and broilers are all predicted to see double-digit increases in receipts.
• Lower direct government payments and higher production expenses are predicted to partially offset higher cash receipts. 
• Direct government farm payments are expected to fall by $17.7 billion (38.6%) from $45.7 billion in 2020 to $28.0 billion in 2021. Such direct payments increased by $23.2 billion, or 103.5%, from 2019 to 2020.
• Spending in nearly all categories of expense is predicted to rise. Total production expenses, including operator dwelling expenses, are predicted to increase by 26.1 billion (7.3%) to $383.5 billion.
• Farm assets are predicted to increase by $79.0 billion (2.5%) to $3.35 trillion, mostly because of an anticipated rise in real-estate value.
• Overall farm debt is forecast to stay mostly the same from 2020, decreasing $1.0 billion (0.2%) to $443.9 billion. 
• Farm sector equity and assets are predicted to decline by about 1.0% from 2020.

Farm income forecast due Thursday; online event at 1 ET

The Agriculture Department's Economic Research Service will release its second Farm Income Forecast for 2021 on Thursday, Sept. 2. That same day at 1 p.m. ET, USDA economist Carrie Litkowski will host a free, one-hour webinar to discuss the contents of the report. Click here to register for the webinar.

The most recently published farm income forecast, released in February, predicted that net farm income would drop $9.8 billion to $111.4 billion in 2021. Though cash receipts were expected to increase in 2021, lower direct government farm payments were predicted to drive most of the decline in net income measurements. Higher production expenses, including spending on feed, fertilizer and labor, was also expected to contribute to the decline in net income. That's particularly significant as drought drives up feed prices.

The forecast is updated three times a year, usually in February, August and November. From the webinar page: "These core statistical indicators provide guidance to policymakers, lenders, commodity organizations, farmers, and others interested in the financial status of the farm economy. ERS' farm income statistics also inform the computation of agriculture's contribution to the U.S. economy's gross domestic product."

2021 USDA farm income forecast: cash receipts to rise, but lower direct federal aid expected to drive drop in net income

The U.S. Department of Agriculture's Economic Research Service has published the first of three 2021 Farm Sector Income Forecasts. The forecast is updated three times a year, usually in February, August, and November. You can read the full report here, but below are the highlights. Click here for the December 2020 report for comparison.

• Net farm income, a broad measure of profits, is forecast to decrease $9.8 billion (8.1 percent) to $111.4 billion in 2021.
• In inflation-adjusted 2021 dollars, net farm income is forecast to decrease $12 billion (9.7%) in 2021 after increasing $37.8 billion (44.2%) in 2020 to its highest level since 2013.
• Net cash farm income (a more precise measurement of profits) is forecast to decrease $7.9 billion (5.8%) to $128.3 billion in 2021.
• Inflation-adjusted net cash farm income is forecast to decrease $10.4 billion (7.5%) from 2020 and would be 15.3% above its 2000-19 average ($111.3 billion).
• Cash receipts are expected to increase in 2021, but lower direct government farm payments are predicted to drive most of the decline in both net income measurements.
• Direct government farm payments are forecast at $25.3 billion in 2021, a decrease of $21 billion (45.3%) in nominal terms. The expected decrease is because of lower supplemental and ad-hoc disaster assistance for Covid-19 relief in 2021 relative to 2020.
• Higher production expenses are also expected to contribute to the 2021 decline in net income. Total production expenses, including operator dwelling expenses, are forecast to increase $8.6 billion (2.5%) to $353.7 billion (in nominal terms) in 2021. Most of this reflects higher spending on feed, fertilizer, and labor.
• Cash receipts for all commodities are forecast to increase $20.4 billion (5.5%) to $390.8 billion (in nominal terms) in 2021.
• Total animal/animal product receipts are expected to increase $8.6 billion (5.2%) with increases in receipts for cattle/calves, hogs, and broilers.
• Total crop receipts are expected to increase $11.8 billion (5.8%) from 2020 levels following higher receipts for soybeans and corn.
• Farm business average net cash farm income is forecast to decrease $6,100 (6.2%) to $91,800 per farm in 2021. Farm businesses in all resource regions are forecast to see declines in net cash farm income except the Heartland. 
• When farm businesses are categorized by commodity specialization, most see average net farm income fall in 2021. The exceptions are farms specializing in wheat, corn, soybeans, and hogs.
• When adjusted for inflation, farm sector equity and assets in 2021 are relatively unchanged from 2020.
• Farm debt is forecast to increase by $9.6 billion (2.2%) to $441.7 billion (in nominal terms), led by an expected 3.1% rise in real estate debt. 
• The farm sector debt-to-asset ratio is expected to rise slightly from 13.84% in 2020 to 13.89% in 2021. 
• Working capital, which measures the amount of cash available to fund operating expenses after paying off debt due within 12 months, is forecast to decrease 12% from 2020. 
• Total median farm household income, forecast to increase to $86,086 in 2020, is expected to remain relatively flat in 2021 at $86,917. The income increases in 2019 and 2020, driven by direct government aid, bucked a trend of declining income from 2015 through 2018.
• Economic relief programs such as the Paycheck Protection Program and the latest Covid-19 aid package are expected to boost income among those affected by the pandemic.
• Many farmers rely on off-farm income. The average amount of off-farm income was expected to rise 1.5% to $69,784 in 2020 and to rise 2.3% in 2021 to $71, 407. If that prediction pans out, it will be the highest median off-farm income level since 2014.

Survey of rural heartland bankers shows strongest growth since 2013, from farmland prices and farm equipment sales

Creighton University chart compares current month to last month and year ago; click here to download the full report.

The December Creighton University survey of rural bankers in 10 Midwest states that rely on farming and energy showed the strongest growth for farmland prices and equipment sales since June 2013. The index surveys bankers in about 200 rural communities with an average population of 1,300 in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

For the second time in the past three months, the Rural Mainstreet Index climbed above growth-neutral, climbing to its second-highest level in the past 10 months because of recent improvements in agriculture commodity prices, federal farm aid, and the Federal Reserve's record-low interest rates, according to Creighton economist Ernie Goss, who compiles the survey. The farm equipment sales index moved above growth positive for the first time in 86 months. 

Bankers continued to report "anemic" loan volumes, and non-farm hiring was down by 2.2 percent (non-seasonally adjusted) from pre-pandemic levels and 4.8% compared to 12 months ago. "Bankers were to indicate their top 10 concerns for 2021 and water availability and was the top concern (see tables). Not surprisingly, with strong 2020 farm income and farm commodity prices, farm financial conditions were of least concern for 2021 as judged by bank CEOs," Goss reports.