Government payments up 65.7%
Legislative Watch: COVID package may include more ag aid; Taiwan easing restrictions; full agenda awaits Congress; think food safety; new ERS head.
P. Scott Shearer, National Hog Farmer
Sep 04, 2020
Farm program payments to producers, excluding USDA loans and Federal Crop Insurance Corp. insurance indemnity payments, are forecast to reach $37.2 billion in 2020 or a 65.7% increase according to the USDA's "2020 Farm Sector Income Forecast" released this week. This increase is due to supplemental and ad hoc disaster assistance for COVID-19 relief. This is nearly three times what producers received on an annual basis prior to 2018.
Government payments will go even higher this year with details of a second round of the Coronavirus Food Assistance Program to be announced next week. Also, if Congress reaches an agreement on another coronavirus package it is expected to include additional funding for agriculture.
Government payments will represent 40% of farm income this year, which is the highest amount since 2001, according to an economist at the Kansas City Federal Reserve.
USDA is estimating net farm income, a broad measure of profits, at $102.7 billion or an increase of 22.7% ($19 billion) over 2019. Net cash farm income is forecast to increase $4.9 billion (4.5%) to $115.2 billion.
Report highlights for 2020 include:
· Farm cash receipts are forecast at $358.3 billion, down $12.3 billion or 3.3%.
· Total animal/animal products receipts are forecast to decrease $14.3 billion (8.1%).
o Hog cash receipts are forecast to decline $3.5 billion or 15.9% because of lower price forecast.
o Cattle and calves receipts are forecast to drop $5.1 billion or 7.7% due to lower prices.
· Total crop receipts are expected to increase $2.0 billion (1.0%). Fruits and nuts receipts are forecast to increase with declines for corn, wheat, cotton and soybeans.
· Total production expenses are forecast at $344.2 billion or a decrease of $4.6 billion (1.3%).
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