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ERS raises farm income forecast

2014_0827_USDA-ERS-farm-income-cash-income

The Agriculture Department’s Economic Research Service on Tuesday revised its net farm income and net cash income forecast upward slightly from its February estimate.

Most of the improvement is from increased livestock receipts, but ERS also said that crop prices will remain high enough that government payments will still be lower than in 2013, when crop farmers got direct payments.

“Net farm income is forecast to be $113.2 billion in 2014, down 13.8 percent from 2013’s forecast of $131.3 billion,” ERS said.

“If realized, the 2014 forecast would be the lowest since 2010, but would still remain more than $25 billion above the previous 10-year annual average. After adjusting for inflation, 2013’s net farm income is expected to be the highest since 1973; the 2014 net farm income forecast would be the fifth highest.”

On government payments, ERS said, “Government program payments going directly to producers are expected to total over $9 billion in 2014, representing a 15-percent decrease from 2013.”

“The 2014 forecast includes payments made by the U.S. government in 2014 for losses incurred in earlier years. Market prices are still high enough for most crops that 2014 payments from price-dependent programs (such as countercyclical payments, marketing loan gains, loan deficiency payments, and milk income loss payments) are anticipated to be zero for all but a few commodities (peanuts, upland cotton).

“Farmers are currently expected to receive Average Crop Revenue Election (ACRE) payments in 2014 from their 2013 crop-year revenue losses, mostly from corn.”

On disaster aid, ERS added, “Supplemental and ad hoc disaster assistance payments are forecast to increase significantly in 2014.”

“The continuing drought is expected to generate increased payouts, especially from the Livestock Forage Program (LFP), which is expected to account for over 78 percent of all other government payments in 2014. About 51 percent of LFP payments in 2014 result from the 2012 drought, 35 percent from the 2013 drought, and the remainder from the current 2014 drought.”

USDA Economic Research Service — 2014 Farm Sector Income Forecast