USDA 2009 Farm Sector Income Forecast

The USDA Economic Research Service has shared it’s Farm Income and Costs: 2009 Farm Sector Income Forecast. Some of the highlights (so to speak) are below. Please visit their website to see explanations of the highlights.

Net Farm Income Forecast To Be Down 20 Percent in 2009.
– Net farm income is forecast to be $71.2 billion in 2009, down $18.1 billion (20 percent) from the preliminary estimate of $89.3 billion for 2008. Still, $71.2 billion would be 9 percent above the average of $65 billion earned in the previous 10 years.
– Net cash income, at $77.3 billion, is forecast down $16.1 billion (17 percent) from 2008 but still 7.6 percent above its 10-year average of $71.8 billion. Net cash income is projected to decline less than net farm income primarily because it reflects the sale of $1.8 billion in carryover stocks from 2008. Net farm income reflects only the earnings from production that occurred in the current year.

After reaching record levels in 2008, all three measures of sector earnings are forecast to decline in 2009.
– Net cash income would fall 17 percent, but remain above the previous 10-year average of $71.8 billion.
– Net value-added and net farm income would also decline from record levels but remain well above previous 10-year averages.

Total expenses are forecast to decline for the first time since 2002.
– The 2007 and 2008 increases in farm expenses, at $20.5 billion and $36.2 billion, respectively, were the largest year-over-year absolute changes on record.
– The $13.5-billion decline in expenses projected for 2009 would still leave farm expenses 9 percent higher than in 2007.

The 2009 forecast would also be the first decline in crop receipts since 1999.
– Crop receipts have increased by 20 percent or more in each of the last 2 years; at $162.4 billion, 2009 receipts would be the second highest on record.

Government payments are forecast to fall in 2009 to their lowest level since 1997.
– Most of the decline from 2008 is due to lower projections for ad hoc and emergency assistance payments.