USDA projects 'moderate' farm income drop in 2016
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WASHINGTON, Feb. 9, 2016 - USDA's Economic Research Service released its annual income projections today, and the agency forecasts that farmers will make a little, not a lot, less in 2016 than they made last year.
Relative to 2015 figures, net cash income is forecast down 2.5 percent to $90.9 billion and net farm income is projected to drop 3 percent to $54.8 billion. The projected net farm income figure, if realized, would be the lowest since 2002. It would also be the third straight year of decreased net farm income.
Last year, net cash income plunged 29.1 percent from 2014, and net farm income plummeted 40 percent. Considering this year's moderate figures, an ERS official said that might be a signal of a normalizing trend.
“The main takeaway is that we're forecasting net cash and net farm income to both be down, but by moderate amounts,” Jeff Hopkins, the chief of ERS' Farm Economy Branch, said Tuesday. “The sector has had very sharp declines in 2014 and 2015, and the moderate drop in income . . . you could characterize it as a change from the norm.”
Some other key figures from today's farm income and wealth forecasts, the first for 2016:
- Government payments are projected to increase 31.4 percent to $13.9 billion. Much of that increase comes from the Agricultural Risk Coverage and Price Loss Coverage farm bill programs. Hopkins said payments from both programs are expected to be much higher in 2016 with ARC expected to pay out $7.2 billion and PLC forecast at $1.9 billion.
- Cash crop receipts are expected to experience a slight 0.9 percent drop, much smaller than the animal and animal products cash receipts that are expected to be down by 4.3 percent.
- Perhaps a slight silver lining in the figures is the projected 1 percent drop in total production expenses, which would be down for the second year in a row.
- Total farm household income - which also takes into account income of household members that work off the farm - is projected to increase 4.5 percent to $81,666.
Today's forecast will be updated in August and November.
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