News

Farm income decrease spans three years

Farm income has dropped for the third straight year.  The USDA says producers’ net cash income has fallen another two-and-a-half percent.

“When you look at the last three years, we haven’t had that collective downturn since the 1920s,” said Jim Weisemeyer with Informa Economics, in an interview with Brownfield Ag News Wednesday.  “That says a lot right there.”

Net cash farm income is now under the ten-year average, said Weisemeyer.

“That equals…crunch time in agriculture,” said Weisemeyer.  “You’ve got to watch your costs and you hope to get a price that’s above your cost of production, and hope some of those input costs are going to come down a lot more than USDA says they are.”

Some farm inputs are coming down, such as land rents and fuel, according to the USDA.  The debt-to-asset ratio on the farm is 13.2 percent, said USDA Chief Economist Rob Johansson, in an interview provided by the agency.  That, he said, is about two percentage points more than the record low in 2012 and 2013.

“So we’ve come up, but by only a small margin,” said Johansson, “so again, the bottom line [is that] assets relative to the debt is still extremely strong.”

USDA data, said Johansson, does not indicate that there will be a significant jump in farm bankruptcies or foreclosures.

AUDIO: Jim Weisemeyer (3 min. MP3)