Northern Ag Network
Northern Ag Network
Northern Broadcasting System    Northern News Network    Northern Sports Network
Search This Site...
Search This Site...
USDA Lowers 2017 Farm Income

USDA Lowers 2017 Farm Income

2/9/2017 10:57:00 AM/Categories: General News, Today's Top 5, People in Ag, National News, Ag Issues


by Chris Clayton DTN Ag Policy Editor

 

WASHINGTON (DTN) - USDA sees net farm income continuing to decline in 2017 even though farmers may generate more overall revenue.


In a precursor to the USDA Outlook Forum, USDA reported Tuesday that net farm income is projected to fall 8.7% in 2017 to $62.3 billion, the lowest net farm income totals since 2009. If realized, this would mark the fourth consecutive year of declining net farm income after peaking at a record high in 2013, USDA stated in its report.

The numbers look worse when adjusted for inflation. When inflation is factored in, USDA stated net farm income in 2017 will be the lowest since 2002.

Yet, "net cash farm income" for farmers is expected to increase $1.6 billion to $93.5 billion for 2017, a bump of 1.8%. The difference between "net farm income" and "net cash farm income" is mainly due to $8.2 billion more in cash receipts from the sale of old-crop inventory.

In a somewhat confusing explanation, USDA explains the difference is that the "net cash farm income measure counts those (old-crop) sales as part of current-year income while the net farm income measure counted the value of those inventories as part of prior year income."

Breaking down by sector, USDA states cash receipts for dairy should see a bump up of $4.7 billion, or 13.7% higher than 2016 based on higher dairy prices.

That dairy increase, however, will be offset by lower cattle-calf receipts, which will fall by $4.5 billion, or 6.7% for the cattle sector.

The forecast for crops is largely unchanged. Wheat sees the biggest impact in absolute terms with a $1.4 billion decline in revenue, or 16.6% compared to 2016.

Direct government payments to farmers will be down about $500 million, or roughly 4%, to $12.5 billion.

Total production expenses are expected to remain flat after two consecutive years of slight declines. Feed, livestock and seed expenses are projected to decline 2.6% overall. Fertilizer expenses are expected to fall 9.1% but fuel-oil expenses are going to rise by a projected 13.1%. Labor costs are also expected to increase 5.4% this year as well.



Other Financial Indicators

Farm assets are also forecast to dip by 1.1% this year and farm debt is projected to increase 5.2%.

The key to the decline in farm assets is a 0.3% dip overall in the value of farm real estate as well as declines in other equipment assets. Debt on real estate also is projected to rise 7.3% for farmers as well.

Farm equity is projected to fall $51.2 billion this year, a drop of 2.1%.

USDA noted the overall weakening condition for farmers when it comes to cash flow and working capital. "Financial liquidity measures, including working capital, are forecast to weaken in 2017, as are solvency measures such as the debt-to-asset ratio. The debt-to-asset measure is now above its average over the previous 10 years."

Though stressing that net farm income will fall 8.7% this year, the median income of a farm household is expected to rebound slightly to $79,733 in 2017. The median farm household income had hit $81,637 in 2014 before backsliding the last two years. The main reason for higher overall median farm income is a bump in the increase in off-farm income. Median off-farm income is expected to increase 6.7% over the next two years.

More details can be found at https://www.ers.usda.gov/…


Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

 

 

© Copyright 2017 DTN/The Progressive Farmer. All rights reserved.


USDA, Economic Research Service Photo

Print
Tags:

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Recent Ag News

USDA Outlook: Not So Good

2/23/2018 5:50:00 AM

A lower U.S. dollar value could boost agriculture exports, but the long-term outlook offers no real light at the end of the tunnel for the struggling farm economy, USDA's chief economist said on Thursday.

>> Read More
Article rating: No rating

Profit Tracker: Packer Margins Continue Slide

2/23/2018 5:47:00 AM
A $3-plus rally in cash fed cattle prices pulled packer margins under $20 per head last week. Despite the increase in cash prices, cattle feeding margins slipped $6 per head, but remain at $206. Declines in cattle feeding profits were the result of higher costs, mostly due to a $57 per head increase in the cost of feeder cattle calculated against last week’s marketings, according to the Sterling Beef Profit Tracker. >> Read More
Article rating: No rating

Act of Sabotage Releases Captured Yellowstone Bison

2/23/2018 4:14:00 AM
Sometime between 9 p.m. on Wednesday and 6 a.m. on Thursday, someone intentionally compromised the fences at Stephens Creek, releasing approximately 73 of the 96 bison that were inside the pen. >> Read More
Article rating: No rating

Senate holds Oversight Hearing on the U.S. Commodity Futures Trading Commission

2/22/2018 8:25:00 AM

 Last week, the U.S. Senate Agriculture Committee held a hearing with Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo titled State of the CFTC: Examining Pending Rules, Cryptocurrency Regulation, and Cross-Border Agreements.  >> Read More
Article rating: No rating

Merck Animal Health Introduces Banamine Pour-On

2/22/2018 8:08:00 AM
Merck Animal Health, known as MSD Animal Health outside of the U.S. and Canada, has introduced Banamine Transdermal (flunixin transdermal solution) — the first and only U.S. Food & Drug Administration approved product for pain control in a food-producing animal. >> Read More
Article rating: No rating
RSS

Find Articles by Date

«February 2018»
MonTueWedThuFriSatSun
29234
561011
1718
2425
2627281234
567891011