The U.S. Department of Agriculture’s Economic Research Service (ERS) indicated on Thursday that, “Net farm income, a broad measure of profits, is forecast to decrease $9.8 billion (13.0 percent) from 2017 to $65.7 billion in 2018, after increasing $13.9 billion (22.5 percent) in 2017. Net cash farm income is forecast to decrease $12.4 billion (12.0 percent) to $91.5 billion.”
The ERS update noted that, “In inflation-adjusted 2018 dollars, net farm income is forecast to decline $11.4 billion (14.8 percent) from 2017 after increasing $13.0 billion (20.3 percent) in 2017. If realized, inflation-adjusted net farm income would be just slightly above its level in 2016, which was its lowest level since 2002.”
Thursday’s report also indicated that,
- Corn cash receipts are forecast down $0.8 billion (1.8 percent) due to lower expected quantities sold, while wheat cash receipts are forecast up $0.5 billion (6.3 percent) due to higher prices.
- Direct government farm payments—which include Federal Government farm program payments paid directly to farmers and ranchers but exclude insurance indemnity payments made by FCIC and USDA loans—are forecast to decline $2.0 billion (17.4 percent) to $9.5 billion in 2018, as declines in Agriculture Risk Coverage and Price Loss Coverage payments more than offset an expected increase in supplemental and ad hoc assistance and other programs.
- Federal Crop Insurance Corporation indemnities—payments made by private insurance companies to farm operators for their insured commodity losses—are forecast to rise by $0.9 billion (17.4 percent), to $6.1 billion, in 2018. FCIC premiums paid are expected to decline by $0.2 billion (5.6 percent).
- Total production expenses, including operator dwellings, are forecast to increase $11.8 billion (3.3 percent) in 2018 to $365.9 billion. Expenses for fuels/oils are forecast up $2.3 billion (17.8 percent) and interest expenses, including dwellings, are forecast up $3.2 billion (17.3 percent). Hired labor expenses are forecast to increase $1.5 billion (5.1 percent). Feed is forecast to increase $2.6 billion (4.8 percent).
