Fueled by $14.5 billion in Trump tariff payments, U.S. net farm income will climb to its highest total since the commodity boom crested in 2013 and a dramatic rebound from the plunge that accompanied its collapse, the USDA estimated. When crop insurance indemnities are added to "direct farm program payments," a category that includes trade war aid, land stewardship payments and traditional crop supports, the government will provide an unusually high 31 percent of farm income this year.
Low commodity prices and high costs are tightening the credit squeeze on the farm sector, with little expectation of improvement in the near term, according to ag bankers in the Midwest and Plains. Some farmers and ranchers will liquidate assets during the winter to stay afloat, and some highly leveraged operators will be forced out of business, they said.
With a return to normal weather, farmers will expand vastly their corn and soybean plantings next year — enough to produce their largest corn crop ever and the fourth-largest soybean crop, according to USDA's agricultural projections. Bumper crops will drive down market prices in the near term and create huge stockpiles that will take years to whittle down.
An array of factors, from foreign competition to slower economic growth at home and abroad, will constrain U.S. farm income in the near term, notwithstanding the impact of trade war and bad weather this year, said a panel of economists on Tuesday. One of them, Seth Meyer of the University of …
Farmers and ranchers will receive a projected $10.7 billion in Trump tariff payments this year, the major reason that direct federal payments will amount to 22 percent of net farm income, say USDA economists. The trade war payments would be twice as large as last year's $5.1 billion, when the administration created the stop-gap Market Facilitation Program to mitigate the impact of the Sino-U.S. trade war on the agricultural sector.
Farmland values are falling for the fifth year in the Midwest, and one factor in the decline is “muted expectations for farm income” this year, said the Chicago Federal Reserve Bank on Thursday. “The profitability of many corn and soybean farms will almost surely fall from their 2018 levels — possibly by a lot for some.”
Agricultural lenders expect farm income, which weakened in the spring, to continue to decline this summer, although a recent rally in corn, soybean, and wheat prices will act as a stabilizer, said Federal Reserve banks in Kansas City, Minneapolis, and St. Louis on Thursday.
American farmers, having endured the wettest 12 months in well over a hundred years and facing predictions that this could be the soggy new normal for the nation’s midsection, are looking at a variety of ways to speed up their processes next year, according to Bloomberg.
The farm safety net offers many strands of support to farmers swamped by a historically slow planting season, but the strands pull in different directions, says associate professor Bradley Lubben, of the University of Nebraska. "The complexity for producer decision-making is compounded," he said, when potential Trump tariff payments and disaster aid are woven into traditional crop subsidies and crop insurance.
Higher grain and soybean prices will increase U.S. net farm income modestly this year, said a University of Missouri think tank on Monday. The Food and Agricultural Policy Research Institute projected a $5.5 billion increase in net farm income, a broad measure of profits, compared to 2018, in line with a USDA estimate of a $6.3 billion increase.