Market News & Headlines >> U.S. Net Farm Income seen down 8.7% in 2017

USDA expects net U.S. farm income to fall for a fourth straight year in 2017, mostly due to lower crop receipts and smaller government payments. 

Overall net farm income for 2017 is forecast to decline by 8.7% from the 2016 level to $62.3 billion, USDA’s Economic Research Service said on Tuesday. Net cash farm income, a narrower cash-based measure of profitability is forecast to rise by $1.6 billion or 1.8% to $93.5 billion from the 2016 level. 

Estimated net farm income for 2016 was revised upward by 2.0% to $68.3 billion from the previous forecast made in November, while 2016 net cash income was also revised upward by 2.0% to $91.3 billion. 

The annual value of U.S. agricultural sector production is expected to fall $5.3 billion or 1.3% in 2017, due primarily to a decline in the value of crop production. ERS forecasts the value of crop production decline of $9.2 billion or 4.9% in crop values versus last year. The value of animals/animal products is expected to decline about 0.5%, while other farm-related income is expected to rise by $4.8 billion or 9.8%. 

Farm asset values are forecast to decline by 1.1% in 2017, and farm debt is forecast to increase by 5.2%. Farm sector equity, the net measure of assets and debt, is forecast to fall by $51.2 billion or 2.1% in 2017. 

The balance sheet forecast indicates farm solvency remains high overall even though farm solvency ratios have weakened for five consecutive years. Liquidity ratios and working capital have likewise deteriorated and are at their weakest levels since 2002.