Earlier this week, USDA analysts released their first farm income forecast for 2020, and for net cash income.
“We’re actually looking at about a 9% decrease down to $109.6 billion,” said senior USDA economist, Ashley Hungerford.
She added the decrease is not because of a drop in sales receipts for crops and livestock. USDA has cash coming in for all commodities, up $ 2.7 billion from 2019. So why is overall net cash income for farmers projected lower?
First, Hungerford noted an $ 8.7 billion decline expected in government payments to farmers. Second an expected 3% hike in total production costs, the first increase in several years.
“Because farmers have been tightening their belts for several years but what we see for 2020 is expenses outweighing that belt tightening.”
The possible result is a 2.3% increase in farm debt. Hungerford said if you adjusted that debt for inflation, farmers are dealing with levels not seen since 1982.