In this file:
· USDA: net farm income to be up, net cash farm income to be down, in 2020.
· USDA Forecasting Net Cash Farm Income Down for 2020
USDA: net farm income to be up, net cash farm income to be down, in 2020.
By Stephen Lee, Capital Journal (SD)
Feb 10, 2020
By one measure, farm income this year will go higher, while by another calculation, it will be lower than 2019 figures. Both measures come from the U.S. Department of Agriculture. The difference, in part, is whether grain sales are counted when the grain’s grown or when it’s taken to market.
Last week, USDA said net cash farm income will decrease 9 percent, or $10.9 billion, to $109.6 billion this year, compared with 2019.
Meanwhile, in the same report, USDA said net farm income, which is a “broader measure of profits,” will go up 3.3 percent, or $1.3 billion in 2020 compared to $96.7 billion in 2019.
The difference comes because net cash income forecasts include $14.7 billion in cash receipts in 2019 from the sale of grain in the bin, but only $500 million worth of such cash receipts from farm inventory sales is forecast for 2020.
The “net farm income” figures exclude such sales from crop inventories, because it measures crop production in the year it was harvested, not the year when it was sold, USDA economists said in the report issued Feb. 5.
It’s not typical for the two farm income measurements to vary that much, but it’s “not completely unheard of,” USDA economist Carrie Litkowski said, according to Agweek magazine.
Both net farm income and net cash farm income projections for 2020 are near their averages for 2000-2018, a period that includes the big four-year swing into the highest prices ever seen on farms and ranches, 2011-2014, or so. Prices for corn, wheat and soybeans, as well as cattle, went way high during that stretch.
Big factors in 2020 will be a drop in government payments to farmers and ranchers of about $9 billion, plus an increase in cash expenses, Litkowski said in an online presentation about the report last week. The “Market Facilitation Program,” that the Trump administration used to give farmers payments in lieu of estimated losses due to trade wars with China, is not expected to send as much federal funds to farmers this year.
So, direct government payments to farmers are forecast to to decrease from $23.7 billion in 2019 to $15 billion in 2020, a 36.7 percent drop...
... Philip Wipf, a cow/calf producer from Wessington Springs, said prices received by cattle producers have decreased nearly 60 percent since country-of-origin labeling, or COOL, was repealed in 2015. Many cattle producers in the state say when their product can be clearly differentiated from beef raised in other nations, they can compete better...
USDA Forecasting Net Cash Farm Income Down for 2020
Radio 570 WNAX (SD)
Feb 10, 2020
The U.S. Department of Agriculture is forecasting net cash farm income to fall 9 percent in 2020 to $110 billion. The agency ties that to lower government payments with an expected decrease in MFP payments, rising expenses and low grain prices. SDSU Extension Agribusiness Specialist Matt Elliott says those numbers and trends are not surprising.
He says the income trend continues to indicate poor margins for producers.
Elliott advises producers to have a solid risk management plan in place for their operations to continue to weather the downturn...
more, including audio [1:29 min.]