Net Cash Farm Income To Reach 9-Year Low, USDA says
U.S. farmers will make less money in 2018 than they did last year, according to the USDA’s Economic Research Service.
This is no surprise to many, especially farmers.
On Thursday, ERS released its Net Farm Income Forecast.
The report indicates that net cash farm income and net farm income are two conventional measures of farm sector profitability.
Inflation-adjusted U.S. net farm income is forecast to decline $11.4 billion (14.8 percent) from 2017 to $65.7 billion in 2018, while inflation-adjusted U.S. net cash farm income is forecast to decline $14.6 billion (13.8 percent) to $91.5 billion.
“The forecast declines are largely due to higher production expenses, which if realized, would reduce net income,” the ERS release stated.
Additionally, government payments are forecast to decline $2.3 billion (19.1 percent). “However, the 2018 forecast for government payments, net farm income, and net cash income do not include payments under the Market Facilitation Program (MFP), because it is too early to tell from the details announced August 27, 2018 how many farm producers will complete MFP enrollment and receive payment in 2018,” according to the ERS statement.
Inflation-adjusted net farm income is forecast to be just slightly above its level in 2016 and at its second lowest level since 2002; inflation-adjusted net cash farm income is forecast to be at its lowest level since 2009, the ERS stated.
Net cash farm income measures cash receipts from farming as well as farm-related income, including government payments, minus cash expenses.
Net farm income is a more comprehensive measure that incorporates non-cash items, including changes in inventories, economic depreciation, and gross imputed rental income, according to the ERS statement.
In Agriculture.com’s discussion group of Marketing Talk, farmers reacted to today’s ERS report showing falling income. Not all farmers are seeing weaker income.
WCMO, a Missouri farmer says that he is doing what he can to stay farming.
“I had a few really good years, controlled capital spending, and am not currently carrying an operating loan balance. So, I’m weathering the storm. This too shall pass, assuming the government doesn't take actions to kill us while taking actions to make things better,” WCMO stated in a post.
Hobbyfarmer, a southern Iowa farmer, says that he is not participating in the lower farm income trend being reported.
“Not participating in the decline. Not everyone is,” Hobbyfarmer stated on Agriculture.com’s Marketing Talk discussion group.
Hobbyfarmer adds, “46 years of hard work, and some planning is bearing fruit and paying out in one instance huge dividends. Blindly following the herd will get you in the pile at the bottom of the buffalo jump.”