The USDA has come out with its first forecast for 2020 farm income.
The outlook shows the possibility of a drop in cash income for US producers.
Ashley Hungerford, USDA senior economist.
Hungerford: “We’re actually looking at about a 9% decrease down to 109.6 billion.”
Hungerfors says cash receipts for crops and livestock are actually up. The USDA forecast sales up 384 Billion up 2.7 billion from the year before. Crops receipts are expected to be up about 1 percent. Animal and animal products receipts are expected to rise 4.5% over 2019.
There are a couple reasons for overall decline. Hungerford says there will be a big decline in government payments to farmers. She says there will not be a Market Facilitation Program for 2020 with the USMCA and China trade agreements in place. That amounts to a drop in government payments of 8.7 billion dollars in 2020.
Overall total production costs are also going up.
That translates to a projected increase in farm debt of 2.3% and a 15% reduction of working capital that farmers use for operations.
Adjusted for inflation that kind of debt hasn't been seen since 1982. She says this is an early forecast and there is time for improvement.