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US farm income to hit lowest level since 2009


Farm income has been forecast to fall for the third year

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US farm income to hit lowest level since 2009

Farm sector profitability is forecast to decline for the third year, according to the latest figures from the US Department of Agriculture (USDA).

Most US farm households are currently earning all of their income from off-farm sources.

Agriculture Secretary Tom Vilsack said the figures show the ’unique ability of American farmers and ranchers to make sharp business decisions in a challenging market’.

"The estimates showed debt to asset and debt to equity ratios – two key indicators of the farm economy’s health – continue to be near all-time lows."

Average farm income earned by farm households is estimated to be -$1,353 (-£1,014.67), but off-farm income is to increase 2.5 per cent to $69,159 (£51,865) this year.

The average income of farm households is forecast to fall to $76,282 (£57,207), decreasing from a high of $81,637 (£61,223) in 2014.

Net income

Net farm income is forecast to drop to $71.5 billion (£53.62bn) this year, the lowest figure since 2009, and net cash farm income is expected to fall to $94.1bn (£70.55bn), down by 13.3 per cent from last year.

Excluding property and land loans, farm debts are forecast to reduce by 4.6 per cent, as an increase in short-term commercial bank loan rates has made them more expensive.

Direct Government farm programme payments are projected to rise by $2.7bn (£2.02bn) to $13.5bn (£10.12bn).

Mr Vilsack highlighted Government investment in US agriculture in the domestic market and internationally.

He sais: "Outside the US, demand for American-grown food and agricultural products remains strong.

"Agricultural exports have surpassed $1 trillion since 2009, besting all previous records in terms of value and volume and acting as an engine for America’s farm economy."

Key forecasts

  • Cash from livestock expected to be down 5.5 per cent
  • Feed crops, vegetables and melons cash receipts expected to be down 7.5 per cent
  • Commodity receipts expected to increase by at least 1 per cent
  • Asset values expected to decline 2.2 per cent
  • Production expenses expected to decline 2.8 per cent
  • Total farm debt expected to fall 0.8 per cent
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