In its recent forecast of farm sector income and finances, the U.S. Department of Agriculture’s Economic Research Services projects farm sector profitability will decline for the second straight year in 2015. Net cash income is forecast at $100.3 billion, down about 21% from 2014 levels.
Net farm income is forecast to reach $58.3 billion in 2015, down 36% from 2014’s estimate of $91.1 billion. The 2015 forecast for net farm income would be the lowest since 2006 (since 2002 in inflation-adjusted terms) and a drop of nearly 53% from the record high of $123.7 billion in 2013. As a measure of profitability, net cash farm income is generally less variable over time than the broader net farm income measure.
Crop receipts for 2015 are expected to decrease by $12.9 billion (6.2%) in 2015, led by a projected $7.1-billion decline in corn receipts, $3.4 billion in soybean receipts and $1.6 billion in wheat receipts compared with 2014. Livestock receipts are forecast to decrease by $19.4 billion (9.1%) in 2015, largely due to lower milk and hog prices.
Government payments are projected to rise 16% ($1.6 billion) to $11.4 billion in 2015, and total production expenses are forecast to decrease by $1.5 billion (less than 0.5%). The increase in government payments is due to low commodity prices and a concomitant rise in commodity-based payment programs.
Median farm income levels remain negative for farm households, while off-farm income is expected to rise from $70,000 in 2014 to $72,494 in 2015. The median total farm household income in 2015 is down about 1.7% from $80,620 in 2014 to $79,287 this year. The USDA points out that most farm households earn all their income from off-farm sources.
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