Thursday, December 01, 2016

Farm income to decline for third straight year

Farm income is predicted to decline in 2016 for the third straight year since reaching record highs in 2013, says a report by the Economic Research Service of the U.S. Department of Agriculture. Net cash farm income is forecast at $90.1 billion, a decline of 14.6 percent, and net farm income at $66.9 billion, a decline of 17.2 percent. Net cash farm income declined 19.8 percent in 2015 and net farm income by 12.7 percent. (USDA graphic: Net farm income from 2000-2016)
While crop receipts are expected to remain mostly unchanged, "animal products receipts are forecast to drop $23.4 billion, about 12.3 percent, in 2016," Spencer Chase reports for Agri-Pulse. "For the second straight year, production expenses are expected to decrease. ERS forecasts a 2.6 percent drop in 2016 after those same expenses fell 8.1 percent in 2015. The 2016 decline is expected to total about $9.2 billion. Expenses peaked in 2014 at $390 billion. Net rent expenses are also expected to drop in 2016 by almost $20 billion, or 1.6 percent."

"Some slight relief looks to be headed to producers as production expenses are predicted to fall while government payments increase," Chase writes. "Those payments are seen rising by $2.1 billion, or just over 19 percent in 2016, pushed by a whopping 159.6 percent jump in payments under the Price Loss Coverage program and a 35.7 percent increase in the Agricultural Risk Coverage program."

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