The Department of Agriculture is projecting a more optimistic view of the farm economy than it did a year ago.
In tables released Thursday, USDA projects 2019 net farm income at $77.6 billion, a $14 billion increase from the projections made last year. The upward swing comes as USDA projects an increase in 2019 cash receipts — $375.8 billion in this year’s report, rising $11 billion from last year — and a drop in cash expenses — $322.3 billion, a $3 billion drop from last year's projections. Direct government payment projections for 2019 rose $1.2 billion to $10.2 billion.
However, USDA's Economic Research Service farm income team will release the first 2019 estimate of net farm income using more recent U.S. Supply and Demand information in their report expected March 6.
"It's early to look at any projections for 2019 farm income. We don't know what crops are going to be planted or what yields are going to be and that in turn will impact prices. We don't know what total expenses are going to be, but I expect that higher interest expenses along with the tariffs U.S. farmers are paying for some of their supplies and machinery to have a measurable impact," American Farm Bureau Chief Economist John Newton said.
The projections come in tables illustrating USDA's long-term agricultural projections. An accompanying report offering further clarifications is expected next month.
USDA's improved economic outlook extends through the next decade. Year-by-year net farm income comparisons through 2028 are all about $10 billion or more higher this year compared to last year's figures. The peak forecast is the $79.5 billion predicted for producers in 2028.
While the income numbers offer an improved perspective, the trade outlook offers a slightly diminishing role for the U.S. on the global export stage.
U.S. corn exports are expected to steadily climb from 61.6 million metric tons in 2019/20 to 69.9 in 2028/29. However, U.S. trade share for global corn exports is expected fall from 37.8 percent in 2019/20 to 35.8 in 2028/29.
Soybean exports tell a similar story over the next decade. U.S. exports are expected to slowly climb from 56.5 in 2019/20 to 61.4 mmt in 2028/29, but U.S. trade share is expected fall from 35.5 percent to 31.3.
USDA also expects China to import far less soybeans over the next decade. The department expects China’s imports to increase from 97 to 126 by the end of the 2028/29 import year. Last year, USDA pegged Chinese soybean imports to rise to 143 mmt by 2027/28.
U.S. Wheat exports are expected to remain steady at 28.6 mmt in 2019/20 before falling slightly to 27.2 in 2020/21 remaining steady until 2028/29. U.S. trade share is expected to fall from 51.4 to 12.8.
USDA also projects export growth for beef and pork producers coupled with increased cash receipts in the livestock sector.
*This story was updated at 11:30am Friday, Feb. 15, 2019 to provide additional comments and clarification*
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