Agri-Pulse's Rebekah Alvey reported that "the House released a fiscal 2025 budget resolution Tuesday that would direct the Agriculture Committee to cut $230 billion over 10 years, an amount that…
2018 U.S. Farm Income Forecast Released
The U.S. Department of Agriculture’s Economic Research Service (ERS) indicated on Wednesday that, “Net farm income, a broad measure of profits, is forecast to decrease $4.3 billion (6.7 percent) to $59.5 billion in 2018, which would be the lowest level in nominal terms since 2006.”
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The ERS update noted that, “Crop cash receipts are forecast to be $188.2 billion in 2018, a decrease of $1.5 billion (0.8 percent) from 2017.
Corn receipts are expected to decline $1.9 billion (4.0 percent) in 2018, reflecting forecast declines primarily in prices but also quantities sold.
“Wheat receipts are expected to decline $0.3 billion (3.5 percent) from 2017 as a predicted decline in quantity sold more than offsets an expected increase in the price of wheat. Higher soybean receipts ($1.7 billion or 4.5 percent) are predicted in 2018 as higher expected quantities sold more than offset an anticipated decline in price.”
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Turning to livestock, ERS explained that, “Total animal/animal product cash receipts are expected to fall $0.5 billion (0.3 percent) to $174.9 billion in 2018. Declining receipts for milk, turkeys, and broilers are projected to more than offset higher receipts from other animals and animal products.”
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On the issue of federal government farm program payments, Wednesday’s update noted that, “Direct government farm program payments are forecast to decline 18.6 percent ($2.1 billion) from 2017 to 2018 in nominal terms.”
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More narrowly on the Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) programs, ERS stated that, “The $737-million (23 percent) decrease in PLC payments in 2018 mostly reflects expected increases in 2017 market-year prices for commodities—including wheat and long-grain rice—where payments are expected, reducing their 2018 calendar-year PLC payments.”
“ARC payments in 2018 are expected to decline over $1.1 billion (31 percent) from 2017. The decrease in ARC payments from calendar year 2017 (2016 crop year ARC payments) to calendar-year 2018 (2017 crop-year ARC payments) is largely because the 2017 county revenue guarantees are generally lower than for 2016.”
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With respect to production expenses, ERS stated that, “Production expenses are forecast at $359.2 billion (nominal) in 2018, up 1.0 percent ($3.5 billion). When adjusted for inflation, total production expenses are forecast to fall 0.8 percent.”
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More specifically on expenses, Wednesday’s update explained that, “While the 2018 farm sector expense forecast is little changed from the 2017 forecast, this masks fluctuations in individual expense items.”
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ERS also pointed out on Wednesday that,
Farm households typically receive income from both farm and off-farm sources
“In recent years, slightly more than half of farm households have had negative farm income each year. Most of these households earn positive off-farm income—and median off-farm income is forecast to increase 2.3 percent from $66,468 in 2016 to $68,011 in 2017, and another 2.8 percent in 2018 to $69,940.”
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When looking at solvency and liquidity issues, ERS indicated that, “Working capital, which is the amount of cash and cash-convertible assets minus amounts due to creditors within 12 months, is forecast at $56.2 billion in 2018, a 16-percent decline from the 2017 projected amount. This decline reflects expected declines in 2018 farm income and current assets and an increase in current debt.”