Net cash income and net farm income are both forecast to rise in 2017 relative to 2016 estimates, according to the latest forecast from the U.S. Department of Agriculture’s (USDA) Economic Research Service (ERS). If realized, it will be the first increase after three consecutive years of decline.
The agency forecast net cash farm income at $100.4 billion this year, up more than 12 percent from 2016.
Net farm income, which is a broader measure of profits, is forecast at $63.4 billion. That’s a three percent increase from 2016.
The increase in net cash income is attributed 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.
“It is just kind of a minor bump, but it’s a bump as opposed to continuing to fall,” American Farm Bureau Federation (AFBF) Chief Economist Dr. Bob Young told Newsline.
Overall, cash receipts are forecast to increase $14.1 billion, or four percent, in 2017, reflecting an 8.4 percent increase in animal and animal product receipts.
Cash receipts for broilers, hogs and cattle and calves are expected to see strong growth in 2017 after posting significant declines in 2016.
The slight increase is positive news after years of decline, but Young says this year’s overall farm income is still hard to predict.
“Give me a weather forecast and I’ll give you a farm income forecast at this stage in the game,” he said. “We’ve got some of the strongest demand we’ve ever had, but we also have some of the strongest production that we’ve had. So, probably would take a little bit of a production pullback for prices to really pop, but wouldn’t take much of a production pullback for that to happen.”
Young said farm income will remain where it’s at for a while and encouraged farmers to put their business plans together accordingly.