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Farm Income Likely Lower This Year

Amy Mayer/Harvest Public Media

The rural economy across the Midwest could take a hit this year. The U.S. Department of Agriculture expects a 36 percent drop in net farm income, according to economic forecasts released Tuesday.

Lower prices for wheat, corn, soybeans and hogs will hurt many Midwest farms, though USDA economist Mitchell Morehart said the impact could be lessened on some farms thanks to lower production costs. Fuel and feed expenses are both lower this year, while labor costs are higher.

“It’s a mixed picture” on the expense side, Morehart said, “so it depends on how each individual business is configured in terms of the importance of each of those inputs.”

Parts of the Midwest could see declines lower than the predicted national average, but the USDA doesn't expect any part of the nation to be spared.

“We see declines being widespread,” Morehart said. “In other words there is not a region of the country where incomes are going to go up in 2015, in our current forecast.”

But Morehart said that doesn’t mean the long-term outlook for farming is bleak.

“The balance sheet remains very financially sound,” he said.

Land values and rents remain strong. Although farmers have taken on more debt than they’ve had in recent years, Morehart said that’s not a cause for alarm.

“There’s a lot of reasons why there’s not comparability to what occurred in the 1980s,” Morehart said.

Prominent among those: interest rates that are five to ten times lower now than they were back then.

Amy Mayer is a reporter based in Ames. She covers agriculture and is part of the Harvest Public Media collaboration. Amy worked as an independent producer for many years and also previously had stints as weekend news host and reporter at WFCR in Amherst, Massachusetts and as a reporter and host/producer of a weekly call-in health show at KUAC in Fairbanks, Alaska. Amy’s work has earned awards from SPJ, the Alaska Press Club and the Massachusetts/Rhode Island AP. Her stories have aired on NPR news programs such as Morning Edition, All Things Considered and Weekend Edition and on Only A Game, Marketplace and Living on Earth. She produced the 2011 documentary Peace Corps Voices, which aired in over 160 communities across the country and has written for The New York Times, Boston Globe, Real Simple and other print outlets. Amy served on the board of directors of the Association of Independents in Radio from 2008-2015.
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