Market News & Headlines >> USDA Sees Modest Increase in Net Farm Income

USDA on Wednesday forecast U.S. net farm income for 2017 at $63.2 billion, down marginally from its August estimate of $63.4 billion, but still up modestly over last year.

USDA’s forecast represents a modest 2.8% increase over 2016 net farm income of $61.5 billion. The increase in net income would be the first since 2013. Net cash farm income is forecast to increase $3.7 billion or 3.9% to $96.9 billion.  USDA’s Economic Research Service notes that with inflation factored in, 2017 net farm income will be about steady with 2016, while net cash income will be up 2.1%. 

The stronger forecast growth in net cash farm income is largely due to an additional $2.1 billion (nominal) in cash receipts from the sale of beginning-of-year crop inventories, the ERS said. 

Cash receipts are forecast to rise $8.6 billion or 2.4% this year to $365.1 billion, led by a $12.4-billion (7.6%) increase in animal/animal product receipts. Dairy, poultry/egg, hog, and cattle/calf receipts are up, reflecting expected increases in both price and quantity sold. Total cash receipts for crops are forecast to fall $3.8 billion or 2.0% to $189.9 billion, largely reflecting expected declines in fruit/nut and soybean cash receipts. 

After declining for two straight years, total production expenses are forecast to rise $5.3 billion or 1.5% to $355.8 billion in 2017, led by increases in expenditures on interest, hired labor, and fuels/oil. Partially offsetting these increases are expected drops in feed and fertilizer/lime expenses. In inflation-adjusted dollars, total production expenses are forecast to remain flat in 2016.