Farm Income Forecast Shows Decline

Despite an increase in net cash income for producers, the USDA is forecasting a nearly nine percent decline in net farm income which is a broader look at profits and other pieces of the ag economy.

USDA Chief Economist Rob Johannson said that likely means farm profits will be flat or decline in 2017.

“We see about 11 percent of crop farms and a little over 10 percent of animal and animal product farms stressed financially so we would say they are in the highly leveraged or the very highly leveraged categories.”

The decline in net farm income this year is expected to be about half of the drop last year.

Johannson said it’s unclear if this is a sign that the farm economy has hit rock bottom.

“That’s a tough one to call. I would say that in an aggregate level we’re still on a solid foundation.”

Johannson points to farm loan delinquencies and farm debt in much better shape than what we saw in the 1980s.