USDA: Net Farm Income to Decline; Debt, Assets Rise

USDA projects a drop in 2018 farm income.
USDA projects a drop in 2018 farm income.
(Farm Journal)

USDA released net farm income projections for 2018 that call for a $9.8 billion drop from 2017 to $65.7 billion. However, they also anticipate assets and equity to increase.

According to USDA, net cash farm income is forecast to decrease 12.0% to $91.5 billion.

“In inflation-adjusted 2018 dollars, net farm income is forecast to decline $11.4 billion (14.8%) from 2017 after increasing $13.0 billion (20.3%) in 2017,” the agency noted.  “If realized, inflation-adjusted net farm income would be just slightly above its level in 2016, which was its lowest level since 2002.”

USDA’s definition of net cash farm income encompasses cash receipts from farming as well as farm-related income, including government payments, minus cash expenses. Meanwhile, net farm income incorporates noncash items, including changes in inventories, economic depreciation, and gross imputed rental income of operator dwellings.

Cash receipts for all commodities, including livestock, are forecast to remain nearly stable in 2018 at $374.0 billion.

“Both total animal/animal product and total crop receipts are forecast to be relatively unchanged from 2017 as increases in receipts for some commodities are offset by declines in other commodities,” the agency said.

USDA expects farm sector equity to increase by $21.8 billion for a total of $2.62 trillion in 2018. Similarly, farm assets, driven by farmland values, are projected to increase by 1.2% to $3.0 trillion in 2018, reflecting an anticipated 1.8% rise in farm sector real estate value.


While farmland values will increase, so will land related debt. Farm debt is expected to increase by 3.5% to $406.9 billion, led by an expected 4.4% rise in real estate debt.


“The farm sector debt-to-asset ratio is expected to rise while the total rate of return to farm assets is expected to decline in 2018,” USDA said.


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