The United States Department of Agriculture’s (USDA) Economic Research Service (ERS) has issued its Farm Income Forecast for 2009, and the results are predictably not good.According to the ERS news release, net farm income is forecast to be $54 billion in 2009. This is down $33.2 billion (or 38%) from the original estimate o $87.2 billion for 2008. The average net farm income over the last ten years has been $63.2 billion, so the 2009 forecast represents a drop of $9 billion from the previous ten year average.
These numbers likely won’t come as a surprise to many in the agriculture industry. This past year has seen a continued decline in crop prices, while the livestock industry and livestock products have seen a very sharp decline in net income. According to the ERS release, “Sharply declining demand in 2009 has forced farmers to accept prices that are lower than were expected earlier in the year when production plans were made.”
Additionally, the ERS forecasts a decline in input prices from 2008. Still, “the reduction in gross income will far exceed the reduction in production costs, leaving all net measures of income and output below the record or near record levels established in 2008.”
Family farm household income is on the decline as well. Household income is expected to be $75,895, which is 5.2% drop from 2008. This is also 8% below the five year average from 2004-2008. The average family farm can expect to receive 7.6% of its household income from farm sources.
For more information or to see the ERS news release click here.
Posted; 08/27/09
