U.S. cash farm income expected to slump as government aid drops - USDA
P.J. Huffstutter, Reuters
Feb 5, 2020
CHICAGO, Feb 5 (Reuters) - U.S. net cash farm income will fall 11% this year as production costs rise and government aid programs set up to assist producers during the U.S.-China trade war wind down, according to a U.S. Department of Agriculture forecast issued on Wednesday.
The drop, of $13.1 billion in inflation-adjusted 2020 dollars, is expected as direct government farm payments are projected to plummet 36.7% following an estimated decline in payments from the Trump administration’s trade aid programs.
Data show struggles in the U.S. agricultural economy will continue as farm bankruptcies rise and producers face ever-mounting farm debt, prolonged low commodity prices, volatile weather patterns and a fatal pig disease that has decimated China’s herd.
Washington and Beijing signed an initial deal last month to ease tensions in their trade war, which slowed U.S. farm exports to China. The USDA said on Monday farmers will start receiving the final tranche of a second round of trade-related aid payments by the end of this week.
“We are assuming these are the final payments,” USDA Economic Research Service senior economist Carrie Litkowski said on a conference call with reporters.
However, net farm income is expected to tick up 1.4% in 2020, after adjusting for inflation, Litkowski said.
Livestock farmers are expected to sell more animals and meat this year at higher prices, she said. But crop producers face a more complicated picture: corn growers are expected to get lower prices, and soybean growers could struggle with sales due to lower demand.
The difference between net cash farm income and net farm income...