USDA Predicts a Decline in Farm Incomes for 2018
The U.S. Department of Agriculture (USDA) predicts a decline in U.S. farm incomes in 2018, continuing a sweeping downward trend that began in 2013.
The USDA’s Economic Research Service (ERS) states that U.S. net farm income this year will fall by $9.8 billion, or 13 percent to $65.7 billion, from $75.5 billion in 2017. Driving this decline is an atmosphere of uncertainty due to ongoing trade disputes, especially with China, leading to a narrowing of export channels.
When considering inflation-adjusted 2018 dollars, net farm income will decline by $11.4 billion, or 15 percent from 2017 levels - landing only slightly above 2016, which saw the lowest income level since 2002.
For soybeans, the USDA forecasts cash receipts in 2018 to fall slightly by $39.1 million, or 0.1 percent as a price decline was offset by higher volumes, and the majority of these soybeans had been sold prior to China raising its import tariffs by 25 percent.
It is important to note, however, that the ERS included in its analysis government payments, net farm income, and net cash farm income, but did not consider payments under the Market Facilitation Program giving financial aid to farmers negatively affected by ongoing trade tensions.