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Highlights from the 2015 USDA ERS Farm Sector Income Forecast

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U.S. Farm Sector Profitability – The USDA Economic Research Service (ERS) has issued its 2016 outlook for net farm income which is forecast to “… decline for the third straight year. Net cash farm income for 2016 is forecast at $90.1 billion, down 14.6 percent from the 2015 estimate. Net farm income, a more comprehensive measure of profitability, is forecast to be $66.9 billion in 2016, down 17.2 percent. If realized, 2016 net farm income would be the lowest since 2009 in both real and nominal terms … Overall, cash receipts are forecast to fall $23.4 billion (6.2 percent) in 2016 due to a $23.4-billion (12.3 percent) drop in animal/animal product receipts; crop receipts are forecast essentially unchanged from 2015. Nearly all major animal specialties—including dairy, meat animals, and poultry/eggs—are forecast to have lower receipts … After sharp declines in 2015, average net cash farm income for most farm businesses specializing in crop production is expected to improve … For the second year in a row, production expenses are down … Farm asset values are forecast to decline by 2.1 percent in 2016, and farm debt is forecast to increase by 5.2 percent …”

Organization: USDA Economic Research Service (ERS)

Source: November 30, 2016 USDA ERS e-mail announcement of the availability of the latest Farm Sector Income Forecast data sets

Web site: The November 30, 2016 Highlights from the 2015 USDA ERS Farm Sector Income Forecast is posted at
http://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/highlights-from-the-farm-income-forecast/
* Specifically, the 2016 Farm Sector Income Forecast is posted at
http://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/2016-farm-sector-income-forecast/

The November 30, 2016 “Statement from Agriculture Secretary Vilsack on Farm Income Forecast for 2016” is posted at
http://www.usda.gov/wps/portal/usda/usdahome?contentid=2016/11/0251.xml

The November 30, 2016 update of the USDA ERS Farm Household Income and Characteristics is available at
http://www.ers.usda.gov/data-products/farm-household-income-and-characteristics/

The USDA ERS topic page on Farm Sector Income and Finances is available at
http://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/

The USDA ERS topic page on Farm Household Well-being is available at
http://www.ers.usda.gov/topics/farm-economy/farm-household-well-being/

Contact: Questions about the Farm Sector Income and Finances forecast may be directed to the USDA ERS Farm Income Team by e-mail at FarmIncomeTeam@ERS.USDA.gov

Summary: The following information is taken from the November 30, 2016 update of the USDA ERS Farm Income Forecast:

Dips in Farm Sector Profitability Expected Into 2016

Farm sector profitability is forecast to decline for the third straight year. Net cash farm income for 2016 is forecast at $90.1 billion, down 14.6 percent from the 2015 estimate. Net farm income, a more comprehensive measure of profitability, is forecast to be $66.9 billion in 2016, down 17.2 percent. If realized, 2016 net farm income would be the lowest since 2009 in both real and nominal terms.

Overall, cash receipts are forecast to fall $23.4 billion (6.2 percent) in 2016 due to a $23.4-billion (12.3 percent) drop in animal/animal product receipts; crop receipts are forecast essentially unchanged from 2015. Nearly all major animal specialties—including dairy, meat animals, and poultry/eggs—are forecast to have lower receipts, including a 14.8-percent drop ($11.6 billion) in cattle/calf receipts. A marginal expected gain in crop cash receipts is driven largely by a $5.3-billion increase in oil crop receipts, primarily soybeans, while feed crops (mainly corn) and vegetables/melons are down $2.2 billion (3.8 percent) and $1.4 billion (6.9 percent), respectively. While overall cash receipts are expected to decline, receipts for several crop commodities are expected to increase by at least 10 percent above 2015 estimates, including cotton, up $0.9 billion (17.5 percent). Likewise, while animal and animal product receipts are forecast overwhelmingly down in 2016, turkey (up $0.6 billion or 10.6 percent) and miscellaneous livestock (up $0.2 billion or 2.9 percent) receipts both grew. Direct government farm program payments are projected to rise $2.1 billion (19.1 percent) to $12.9 billion in 2016.

After sharp declines in 2015, average net cash farm income for most farm businesses specializing in crop production is expected to improve. Net cash farm income is forecast up for farm businesses specializing in mixed grains (up 10.4 percent), corn (up 15.1 percent), and soybeans and peanuts (up 11.8 percent).

For the second year in a row, production expenses are down. Total production expenses are forecast down $9.2 billion (2.6 percent) compared to 2015, led by declines in farm-origin inputs (feed, livestock/poultry, and seed) as well as fuel/oils.

Farm asset values are forecast to decline by 2.1 percent in 2016, and farm debt is forecast to increase by 5.2 percent. Farm sector equity, the net measure of assets and debt, is forecast down by $79.9 billion (3.1 percent) in 2016. The decline in assets reflects a 0.5-percent drop in the value of farm real estate, as well as declines in animal/animal product inventories, financial assets, and machinery/vehicles. The rise in farm debt is driven by higher real estate debt (up 8.6 percent).

Get the 2016 forecast for farm sector income:
http://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/2016-farm-sector-income-forecast/

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