Monday, December 02, 2019

Farm income predicted to be up, mainly due to trade-war bailout, estimated at 24% of total income, USDA says

Net farm income in 2019 is expected to be 10.2 percent higher than in 2018, mostly because of government payments to compensate farmers for the trade war with China, according to the latest Farm Income Forecast report from the U.S. Department of Agriculture. In inflation-adjusted dollars, it's a $7 billion increase, or 8.2%, from last year. Here are some highlights from the report by the USDA's Economic Research Service:
  • In inflation-adjusted 2019 dollars, net farm income (a broad measure of profits) is forecast to hit $92.5 billion this year.
  • If the forecast is correct, 2019 net farm income would be 2.8% above the 2000-2018 average of $90.1 billion, but 32.3% below its $136.6 billion peak in 2013.
  • Net cash farm income (a more precise measurement of profits) is predicted to increase 15% from last year ($15.5 billion), to a total of $119 billion.
  • Inflation-adjusted net cash farm income is predicted to increase 12.9%, or $13.6 billion, from 2018. That would put 2019 farm income 10% higher than the 2000-18 average, $108.2 billion.
  • Direct payments to farms from the government are expected to total $22.4 billion, which is $8.8 billion higher than in 2018—a 64% increase. If correct, government payments would account for about 24% of all farm income, the largest share in more than a decade.
  • Farm debt is predicted to grow by $13.5 billion in 2019, or 3.4%.
  • Farmers' financial stability is predicted to decrease slightly in the past year as the debt-to-asset ratio, a key measure of financial stability, is expected to increase slightly from 13.28% in 2018 to 13.42%.
  • Total receipts for animals and animal products are expected to be largely unchanged as increases in milk and hog sales are almost offset by poultry and egg sale declines.
  • Adjusted for inflation, total cash receipts are expected to decline $4.6 billion, or 1.2%, because of a $3 billion drop in animal/animal product receipts and a $1.7 billion decline in crop receipts.

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