ARLINGTON, Va., Feb. 23, 2017 – Those hoping for a reverse on the downward trend in net farm income will likely have to wait a little longer, farm economists said on Thursday.
Speaking at the 93rd Annual USDA Agricultural Outlook Forum in Arlington, Va., a trio of farm economists offered a somewhat gloomy picture of the farm economy for the year ahead, although one not unlike the trends observed in recent years. Net farm income is projected to drop almost $6 billion in 2017, tumbling primarily on decreases in the crop sector to a $62.3 billion total.
The drop is a decrease of about 8.7 percent, the fourth consecutive year of declines after record highs were observed in 2013. If realized, the projected figure would be the lowest since 2002.
The potential saving grace for farm families could be a projected bump in farm household income, which also includes income into off-farm enterprises. Median farm household income is projected to rise about 3.4 percent to $79,733.
Net cash income is also projected higher – about 1.8 percent – primarily on the sale of crop inventories. Cash receipts for livestock farms are either down or flat depending on the category.
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While things may appear dire, many economists say an immediate comparison to the farm crisis of the 1980s is premature. Allen Featherstone, a Kansas State University professor of ag economics, said the comparison is a little early, but still possible.
“To me, the jury is really still out in terms of where we end up,” he said, pointing out that a true equivalency to that decade would require about four years worth of similar numbers. He said the current farm economy might be more comparable to the early part of the 1980s before issues were at their peak, “and there still are times for us not to go through the whole cycle.”
Featherstone – and numerous others – have pointed out that the current situation with interest rates is much more favorable than what was seen in the 1980s. However, he said repayment capacity for producers is showing similar patters as the beginning of the farm crisis.
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