Friday, August 28, 2009

Significant downturn in farm income is forecast

While American farms have proven more adept at weathering the economic recession that most industries until now, U. S. Department of Agriculture projections show it isn't immune to the downturn. USDA projected yesterday that there will be a 38 percent fall in U.S. farm income this year.

"This is going to be a very unusual year for farm income with much larger than expected declines," USDA economist Jim Johnson told USDA Daily Radio News. Keith Good of reports, "The 2009 forecast is $9 billion below the average of $63.2 billion in net farm income earned in the previous 10 years."

Scott Kilman and Lauren Etter note in The Wall Street Journal that the economic downturn hasn't affected all farmers equally. The pair write that harvest problems in India have led to the highest sugar prices in 28 years for U. S. farmers, but shrinking foreign demand and low prices have left U. S. dairy and hog farmers "barely holding on."

Kilman and Etter explain that while less than 1 percent of Americans are directly engaged in farming, farmers have a large impact on the economy: "They are big spenders, produce commodities that are ubiquitous in the economy, and use about half of the nation’s land. According to past calculations by the USDA, agriculture and food account for about 13 percent of U.S. gross domestic product.” (Read more)

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