After years of record farm incomes and land values, commodity prices are steadily decreasing and agricultural experts are projecting the lowest average farm income in 10 years, reports Agri-Pulse, a Washington newsletter. (Illinois Farm Business Farm Management graphic)
Gary Schnitkey, with the Department of Agricultural and Consumer Economics at the University of Illinois, told Agri-Pulse that the average net income for an Illinois grain farmer with a 1,400-acre operation is projected to be $45,000, the lowest number in years. Average incomes have fluctuated throughout the years, from $51,000 from 1996 to 2005, to $185,000 from 2006 to 2008, to $93,000 in 2009, to more than $250,000 from 2011 to 2012, down to $134,000 in 2013, Schnitkey says.
The reasons for lower incomes are lower projected prices of corn, down from $4.65 to $4.20 recently, and soybeans, down from $13.25 to $10.75, Schnitkey writes. Crop insurance payments are also projected to be lower "because the 2013 harvest price of $4.39 was 22 percent below the 2013 projected price of $5.65." (Read more)
John Anderson, deputy chief economist with the American Farm Bureau Federation, told Agri-Pulse, "Obviously, we're looking at lower commodity prices on grains and oilseeds and probably cotton this year, so for areas that tend to be pretty heavy in row crop production, I think we've got to expect lower incomes this year."
In February, the U.S. Department of Agriculture's Economic Research Service predicted that 2014 net farm incomes would be $95.8 billion, a 27 percent drop from 2013 when the total was $130.5 billion, Agri-Pulse writes. Ohio State University extension ag economist Matt Roberts told Agri-Pulse, "It's going to be a brutal conversation. I think that time has come when some producers are literally going to have to walk away from the land they are producing on now, simply because the landowners aren't going to be willing to accept the lower rents that the current market conditions justify." Agri-Pulse is subscription only, but a free trial is available by clicking here.
The reasons for lower incomes are lower projected prices of corn, down from $4.65 to $4.20 recently, and soybeans, down from $13.25 to $10.75, Schnitkey writes. Crop insurance payments are also projected to be lower "because the 2013 harvest price of $4.39 was 22 percent below the 2013 projected price of $5.65." (Read more)
John Anderson, deputy chief economist with the American Farm Bureau Federation, told Agri-Pulse, "Obviously, we're looking at lower commodity prices on grains and oilseeds and probably cotton this year, so for areas that tend to be pretty heavy in row crop production, I think we've got to expect lower incomes this year."
In February, the U.S. Department of Agriculture's Economic Research Service predicted that 2014 net farm incomes would be $95.8 billion, a 27 percent drop from 2013 when the total was $130.5 billion, Agri-Pulse writes. Ohio State University extension ag economist Matt Roberts told Agri-Pulse, "It's going to be a brutal conversation. I think that time has come when some producers are literally going to have to walk away from the land they are producing on now, simply because the landowners aren't going to be willing to accept the lower rents that the current market conditions justify." Agri-Pulse is subscription only, but a free trial is available by clicking here.
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