USDA’s Economic Research Service (ERS) is projecting net farm income to be $95.8 billion in 2014, which is down 26.6% from 2013’s estimate of $130.5 billion. The 2014 forecast would be the lowest since 2010, but would remain $8 billion above the previous 10-year average. Lower crop cash receipts and reduced government payments are the main reasons for the drop in net farm income.
According to ERS, “Crop receipts are expected to decrease more than 12% in 2014, led by a projected $11 billion decline in corn receipts and a $6 billion decline in soybean receipts. Livestock receipts are forecast to increase in 2014 largely due to higher milk prices.”
With the elimination of direct payments under the new farm bill, “Agricultural Act of 2014” and uncertainty regarding enrollment and payments during 2014, government payments are projected to decline 45%. Total production expenses are forecast to decline $3.9 billion in 2014, which would be only the second time expenses declined in the last 10 years according to ERS.
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