Market News & Headlines >> USDA Slashes Farm Income Estimate

USDA on Tuesday slashed its estimate of 2015 U.S. farm income by $15.3 billion to $58.3 billion, 36% below last year and less than half of the record $123.7 billion recorded in 2013.

The new farm income forecast was down nearly 21% from USDA’s February estimate of $73.6 billion. If USDA is correct, inflation-adjusted farm income would be the lowest since 2002. The forecast 36% decline in net farm income versus 2014 would be the largest year-over-year decline since 1983.

Lower crop and livestock receipts are the main drivers of the change in 2015 net cash farm income from 2014, while cash production expenses are projected down by 1.1%, USDA’s Economic Research Service said in its latest farm income forecast.

Farm sector profitability is forecast to decline by nearly all measures.  Net cash income is expected to fall by 21% percent in 2015. Crop receipts are expected to decrease by more than 6% ($12.9 billion) in 2015, led by a forecast $7.1-billion decline in corn receipts, a $3.4-billion drop in soybean receipts, and a $1.6-billion drop in wheat receipts, ERS said. Livestock receipts could fall by more than 9% ($19.4 billion), due to a forecast 29% slump in dairy receipts and a 27% decline in hog receipts.

Total production expenses are forecast to fall for the first time since 2009, with energy inputs and feed costs expected to decline most. Expenses are forecast to increase for labor, interest, and property taxes. Government payments are projected to rise 16% to $11.4 billion in 2015, which would be the highest level since 2010.

Declining assets resulting from a modest decline in farmland values and higher debt are forecast to create a 4.8$% decline in equity, the first drop since 2009.