U.S. Farm Incomes to Drop to Lowest Level Since 2002
10 February 2016 - 12:20PM
Dow Jones News
Federal forecasters estimate that U.S. farm incomes will fall
this year to the lowest level since 2002, reflecting a continued
slump in prices for crops and livestock.
Net farm income will drop 3% to $54.8 billion from $56.4 billion
last year, the Agriculture Department projected Tuesday. It would
mark the third consecutive year of falling agricultural incomes
after profits surged to a record $123 billion in 2013—the height of
a boom that graced the Farm Belt earlier this decade.
Farm incomes are declining because prices for corn, soybeans and
wheat have fallen sharply after three straight years of bumper U.S.
crops and rising output elsewhere in the world. Overseas demand for
some U.S. crops also has cooled, in part because of the strong
dollar.
Corn prices have languished below $4 a bushel after soaring to
more than $8 a bushel during the U.S.'s record-setting drought in
2012.
The government estimated that farmers' receipts from corn, the
biggest U.S. crop by value, will drop by $800 million this
year.
The USDA projected a $1.5 billion increase in farmers' receipts
from soybeans as greater production offsets minor price declines.
Soybean prices fell 15% last year as U.S. growers harvested the
largest crop in history.
The nation's livestock producers also face lower profits in
2016, according to the USDA. The government forecast a 4.3%
decrease in livestock receipts, reflecting a decrease in revenues
for milk, hogs, broiler chickens and cattle. The declines come as
U.S. producers continue expanding production of animals like hogs
and broiler chickens, the government said.
Federal forecasters estimated a $3.8 billion decrease in
production expenses for farmers, which would mark the first time
since the 1980s that costs for crop inputs like seeds, fertilizer
and pesticides had fallen for two years in a row.
Farmers' production expenses declined $10.1 billion last year,
the USDA estimated.
Meanwhile, the USDA said government payments to farmers will
rise about 31% this year to $13.9 billion, mostly from
insurance-like programs that protect growers from price or revenue
declines.
Write to Jesse Newman at jesse.newman@wsj.com
(END) Dow Jones Newswires
February 09, 2016 20:05 ET (01:05 GMT)
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