USDA Forecasts Big Drop in Farm Income
New estimate below the 10-year average.
Bryce Knorr
Published: Nov 24, 2009
After enjoying a near-record performance in 2008, farmers will see income drop by more than third this year, according to new estimates put out Tuesday by USDA.
The agency forecast net farm income at $57 billion in 2009, down $30 billion or 34.5% from 2008. The new estimate is below the 10-year average, but still is the eighth largest ever.
While expenses were down in 2009, the first drop since 2002, total costs are still above 2007 levels. Cash receipts dropped faster, falling by $42.1 billion, or half the combined increase of $83 billion that occurred over 2007 and 2008. Crop receipts were down $19.4-billion, to $163.6 billion, while livestock receipts are expected to decline $22.7 billion, or 16.1%.
Farm balance sheets will take a hit from the lower income figures. Asset values fell around 2.4% thanks to less demand for land, machinery, and other farm assets. Debt reached a new high, but USDA said "this fact alone is not a reason for great concern," because farmers have a better base of collateral to service loans: "The farm sector remains in a better position to support farm debt than it was 20 years ago."
"Although the debt-to-asset and debt-to-equity ratios rose in 2008, these solvency indicators are still favorable and are considerably below the levels experienced during the 1981-86 'farm financial crisis.'"
For the complete reports, go to
http://www.ers.usda.gov/Briefing/FarmIncome/
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