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Veteran Advisor

Good News! 2017 Net Farm Income to Rise

Has the worm turned? Here's some good news from today's ERS Farm Income Forecast release. Take a look.

 

Upturn in Farm Sector Profits Expected in 2017


After 3 consecutive years of decline, farm sector profits are forecast to increase in 2017. Net cash farm income for 2017 is forecast at $100.4 billion, up $11.2 billion (12.6 percent) from 2016. Net farm income, a broader measure of profits, is forecast at $63.4 billion, up $1.9 billion (3.1 percent) relative to 2016. The stronger forecast growth in net cash income is largely due to an additional $9.7 billion in cash receipts from the sale of crop inventories. The net cash farm income measure counts those sales as part of current-year income while the net farm income measure counted the value of those inventories as part of prior-year income. Despite the forecast upturn in these profit measures relative to 2016, levels would be below all other years since 2010 (net farm income) and since 2011 (net cash farm income).
Cash receipts are forecast to rise $14.1 billion (4.0 percent) in 2017, led by a $13.6-billion (8.4 percent) increase in animal/animal product receipts. Dairy, poultry/egg, and hog receipts are up, reflecting expected increases in both price and quantity sold. Cattle/calf receipts are up, reflecting expected increases in the quantity sold. Overall, cash receipts for crops are forecast to remain mostly unchanged from 2016 as expected increases for some crops are offset by declines in others. Soybean, cotton, and vegetable/melon cash receipts are forecast to rise, while fruit/nut cash receipts are forecast to fall. Direct government payments are forecast to remain at just under $13.0 billion in 2017.
The 2017 forecast for farm business average net cash farm income is up by 5.8 percent, with the largest increases for farms specializing in dairy (up 42 percent), hogs (up 38 percent) and cotton (up 31 percent). The only declines in average net cash income are for farms specializing in specialty crops (down 15 percent) and other livestock (less than 1 percent).
After declining for 2 consecutive years, total production expenses are forecast up $4.6 billion (1.3 percent), led by increases in expenditures on interest, hired labor, and fuels/oil. Partially off-setting these increases are expected drops in feed and fertilizer/lime expenses.
Farm asset values are forecast to increase by 4.0 percent in 2017, and farm debt is forecast to increase by 4.4 percent. Farm sector equity, the net measure of assets and debt, is forecast up by $101.8 billion (3.9 percent) in 2017. The increase in assets reflects a 4.6-percent rise in the value of farm real estate. The rise in farm debt is driven by higher real estate debt (up 7.5 percent).

 

Median Income of Farm Operator Households Expected To Remain Level in 2017


The total median income of U.S. farm households increased steadily over 2010-14, reaching an estimated $81,637 in 2014. Median household income, which fell 6 percent in 2015, is forecast to remain level at $76,831 in 2017. Median farm income earned by farm households in 2016 is estimated to be negative at -$940 and forecast to dip slightly (to -$1,325) in 2017. In recent years, slightly more than half of farm households have lost money on their farming operations each year. Most of these households earn positive off-farm income—and median off-farm income is forecast to increase 2.3 percent next year, from $66,468 in 2016 to $67,969 in 2017. (Because farm and off-farm income are not distributed identically for every farm, median total income will generally not equal the sum of median off-farm and median farm income.)

 

Mike

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32 Replies
Veteran Advisor

Re: Good News! 2017 Net Farm Income to Rise

The report sounds pretty good, on the average, until you start reading it.  Then you find out that we grain farmers aren't going to do to well, on the average.

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Veteran Advisor

Re: Good News! 2017 Net Farm Income to Rise

What we get for the grain may be more, but so
Was input cost. Then subtract the ever increasing
Cost of living....we are WORSE off.

Why can't you people understand that
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Veteran Advisor

Re: Good News! 2017 Net Farm Income to Rise

elcheapo, Mike is reporting the news.  On this and the Marketing page, some posters write as if he is making the news and therefore to blame for it if they don't like it.  Like what he reports is his fault.  

 

Do you think people actually are blaming the messenger?  Why do people reply to a message by Mike "Why can't you people understand that?"  

 

Who is "you people"?

Veteran Advisor

Re: Good News! 2017 Net Farm Income to Rise

Maybe  we  could  all  get  a 24 or 36 row  planter and cut  our  trips  across  the  field  expense ?  ?

 

Also,  Mike  keep  the articles  coming , I'm  betting  input  costs  recede ? 

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Veteran Advisor

Re: Good News! 2017 Net Farm Income to Rise

https://farmpolicynews.illinois.edu/2017/08/2017-u-s-farm-income-forecast-updated/?utm_source=farmdo...

 

This article says about half of farms will lose money.  It also says that median off-farm income (that means that half the off-farm income is higher and half lower - not an average) is $67,969.  That is what is subsidizing the farms in many cases.

 

 

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Honored Advisor

Re: Good News! 2017 Net Farm Income to Rise

I wonder if some of this "rise" in farm income is like what happened to me a couple 3 years ago.  It was my "worst best year", I saw what was coming and quit buying, many pieces of machinery had been rapid depreciated on sec 179, so I had a year with very little depreciation.  Crop prices were down and I had machinery to make payments on, to make matters worse a huge income tax bill because about the only depreciation I had left was a old baler parked in the back of the shed  Smiley Happy

 

But on paper it looked like I made a ton of money and the taxman thought I made a ton of money, but I was so broke I had to take out a loan to pay income taxes.   Well, I`m slowly digging out from that, but I wouldn`t doubt that many are just entering what I went through.   Some bought a machine with a loan and "roll" to a newer machine for tax advantages, well things are tight so they maybe quit doing that.   well, they still have payments to make on the original note and no depreciation.  So their income looks high, which is bad because of tax implications.

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Veteran Advisor

Re: Good News! 2017 Net Farm Income to Rise

I don't know
.....

Maybe it's you Jim ????????
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Veteran Advisor

Re: Good News! 2017 Net Farm Income to Rise

"I don't know
.....

Maybe it's you Jim ????????"

 

You're blaming me?  That I should have so much power!  Smiley Happy

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Advisor

Re: Good News! 2017 Net Farm Income to Rise

You made your money, BA, you just didn't match the income with expenses. It's not an accounting problem, but one of perception. I'll bet in the years you used 179 deductions, you hid a ton of profits. It was not evenly matched against each side if the ledger.