Profitability in the U.S. farm sector is forecast at the lowest level since 2009 in 2016, with net cash farm income forecast at $90.1 billion, down 14.6% from the 2015 estimate while net farm income is forecast to be $66.9 billion in 2016, down 17.2% from 2015, according to USDA’s 2016 Farm Sector Income Forecast.
Both forecasts mark a downward revision compared to USDA’s prior forecasts when they pegged 2016 net cash farm income at $90.9 billion and net farm income at $71.5 billion.
Overall, cash receipts are forecast to fall $23.4 billion (6.2%) in 2016 due to a $23.4-billion (12.3%) 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% drop ($11.6 billion) in cattle/calf receipts.
Direct government farm program payments are forecast to increase in 2016 by $2.1 billion, or 19.1%, to $12.9 billion. Increases were primarily in price- and revenue-contingent farm programs.
A 2.6% drop in overall production expenses forecast for 2016, on top of an 8.1% decline in 2015, partly offsets the forecast decline in cash receipts. “Reduced input costs are expected to ease, but not eliminate, some of the pressure from lower cash receipts,” USDA noted.