The collapse in crop and livestock prices since 2013 will result in the lowest net farm income since 2009, says USDA. In the final estimate of the year, the Economic Research Service pegged farm income at $66.9 billion, down $4.5 billion from its August estimate and barely more than half of the record income that producers enjoyed just three years ago.
USDA economists lowered the income figure to reflect higher expenses and a dip in revenue. The biggest change was a $3-billion drop in “farm-related” income, a category that includes custom work, rental of machinery, sales of forest products and income from recreational activities. Crop revenue also was forecast lower than in August, as were federal payments to farmers.
All the same, the $12.9 billion in program payments, chiefly crop subsidies and conservation payments, would be the largest since 2010.
Agriculture Secretary Tom Vilsack said the farm economy “is strong in the face of challenging markets.” Gauges of the financial health of the sector, such as the debt-to-asset or debt-to-equity ratios “continue to be near all-time lows and more than 90 percent of farm businesses are not highly leveraged,” said Vilsack.
The debt-to-asset ratio has risen slowly since 2012 and is forecast at 13.2 percent this year, the highest since 13.6 percent in 2009. It was 22.19 percent in 1985, during the agricultural recession of the mid-1980s, the hardest times in recent decades.