U.S. Farm Incomes to Fall for Third Straight Year
U.S. net cash farm income is forecast at $90.1 billion and net farm income at $66.9 billion for 2016. Both measures are forecast to decline for the third consecutive year after reaching record highs in 2013 for net farm income and 2012 for net cash income, U.S. Department of Agriculture said.
Net cash farm income is expected to fall by 14.6% in 2016, while net farm income is forecast to decline by 17.2%. These declines follow the 19.8% and 12.7% percent reductions in net cash income and net farm income, respectively, that occurred in 2015.
Agriculture Secretary Tom Vilsack said, “Today’s forecast continues to show that the health of the overall farm economy is strong in the face of challenging markets. After reaching record highs in 2012-2014, net farm income declined in 2015 and is forecast to decline in 2016, but the bigger picture shows that farm income over the last five-year period reflects the highest average five-year period on record. The comprehensive farm safety net provided by the 2014 Farm Bill will continue to help America’s farmers and ranchers respond to market conditions and provide financial stability for producers. Farm Bill program payments are forecast to increase over 19% to $12.9 billion in 2016, primarily through Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) payments.
“As we saw in the August forecast, the estimates again show that debt to asset and debt to equity ratios — two key indicators of the farm economy’s health — continue to be near all-time lows, and more than 90% of farm businesses are not highly leveraged. Median household income for farming families remains near historic highs and is expected to remain stable relative to 2015. In 2016, higher off-farm earnings are expected to help stabilize losses due to low commodity prices,” Vilsack said.