USDA Farm Income Not Expected To Improve Anytime Soon

Farmers this year and for several years could face continued low commodity prices and rising debt loads.  USDA chief economist Rob Johannson at the recent Ag Outlook Forum said low commodity prices will weigh on farm income for the foreseeable future.  And while the Ag economy does not look great right now, things are much better than the 1980s.

“2018 net farm income was only $66 billion…and that's a long way from the $134 billion  that we saw back in 2013."

Meanwhile farmers are having to borrow more and more money to keep going "and today debt is approaching record levels in real terms and real estate debt reached a record high last year."  Farmers having to use more and more of their cash receipts, 25% on average, just to pay on their debt.  Johannson said that is likely to cause cash flow problems for producers without significant land equity."

And farmers may not get much help on the commodity price side, in fact, for the next ten years "we expect the general trend to continue of declines in agricultural prices when you account for inflation," Johannson added.

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