USDA Forecasts Farm Income To Sink To Seven-Year Low
Profit from U.S. farms will sink to its lowest point since 2009 this year if Agriculture Department predictions are correct.
U.S. net farm income is expected to drop for the third-straight year in 2016, dropping 17.2 percent from the 2015 estimate to $66.9 billion, according to projections from the U.S. Department of Agriculture released on Wednesday.
The livestock sector is expected to be particularly hard hit.
“Nearly all major animal specialties—including dairy, meat animals, and poultry/eggs—are forecast to have lower receipts,” the USDA said in a release.
USDA economists forecast cattle and calf receipts to drop nearly 15 percent from last year’s estimate to $11.6 billion.
Government programs meant to shore up farmers in lean times could pump billions of dollars into the farm economy, Agriculture Secretary Tom Vilsack said in a statement.
“The comprehensive farm safety net provided by the 2014 Farm Bill will continue to help America's farmers and ranchers respond to market conditions and provide financial stability for producers,” Vilsack said.
The USDA expects the most popular government-subsidized crop insurance programs to pay out $12.9 billion to farmers in 2016, Vilsack said.
Vilsack, who tried to paint a rosy picture while acknowledging sinking income forecasts, said debt-to-asset ratios remain much lower than levels that caused massive problems during the farm crisis of the 1980s.
The farm sector saw record profits in 2013, thanks in large part to high corn prices.
Jeremy Bernfeld is the editor of Harvest Public Media, based at KCUR 89.3. Find him on Twitter @JeremyHPM.