Based on data in the USDA Economic Research Service’s 2014 Farm Sector Income Forecast report issued on November 25, net farm income for the year is projected to be down more than 23 percent from 2013.
Net farm income for 2014 is forecast to be $96.9 billion, compared to 2013’s estimate of $126.5 billion. The 2014 forecast would be the lowest since 2010, but would remain $14.5 billion above the previous 10-year average.
Offsetting changes in crop and livestock receipts leaves higher expenses as the main driver of changes in 2014 net farm income from 2013. Net cash income is forecast at $108.2 billion – down over 19 percent from the 2013 estimate. Net cash income is projected to decline less than net farm income, primarily because it reflects the sale of carryover stocks from 2013.
Crop receipts are expected to decrease by $27.2 billion (12.3 percent) in 2014, led by a projected $10.5-billion decline in corn receipts and a $7.9-billion decline in soybean receipts. Livestock receipts are forecast to increase by $25.7 billion (14 percent) in 2014, largely due to anticipated record prices for beef cattle and milk.
The elimination of direct payments under the Agricultural Act of 2014 results in only a projected four percent decline in government payments due to offsetting supplemental and ad hoc disaster assistance payments related to drought.
Total production expenses are forecast to increase $19.8 billion in 2014, extending the upward movement in expenses that has occurred over the past 5 years.
The rate of growth in farm assets is forecast to diminish 2.4 percent in 2014, compared to recent years. The slowdown in growth is a result of lower net income leading to less capital investment, and moderation in the growth of farmland values.
Farm sector debt is expected to grow 3.1 percent, increasing more than assets for the first time since 2009. Most of the anticipated increase in debt is for non-real estate loans with lower income spurring demand for operating funds.
Despite the anticipated higher debt, the historically low levels of debt relative to assets and equity reaffirm the sector’s strong financial position.
Source – USDA