Nationally, farmers are expected to earn $9.8 billion less in net farm income for 2018 than they earned in 2017, USDA's Economic Research Service posted Thursday.
Looking at net farm income, which ERS describes simply as "a broad measure of profits," farmers are expected to make $65.7 billion in 2018, down 13% from 2017's figure of $75.5 billion.
In comparison to better days, net farm income in 2013 was $123.8 billion before the numbers began trending downward. 2018 is higher the recent floor, which was $61.6 billion in 2016.
Net farm income is viewed as a more comprehensive measure of receipts, but includes changes in inventory, depreciation and rental income.
A narrower figure, "net cash farm income," is projected to fall $12.4 billion to $91.5 billion for the year. Net cash farm income takes into account cash receipts from farming as well as government payments, minus cash expenses.
Overall cash receipts for commodities are forecast to remain relatively stable at $374 billion as both livestock and crop receipts are overall unchanged. Increases in income in some commodities are then offset by declines in others. Income for milk products is expected to decline $2.8 billion (7.4%) while income for poultry and eggs are expected to increase $5.2 billion (12.1%).
A forecast of $800 million decline in corn income (1.8%) will be partially offset by a forecast $500 million increase (6.3%) in receipts for wheat.
Direct government farm payments are forecast to decline $2.0 billion (17.4 percent) to $9.5 billion in 2018, with most of these declines due to lower anticipated Agriculture Risk Coverage and Price Loss Coverage program payments. This report, however, does not include the $4.7 billion in farm trade aid detailed on Monday. ERS states in a note that it is way too early to tell how many farmers will enroll in the Market Facilitation Program and receive a payment in 2018.
While income remains about the same for 2018, total production expenses are projected to go up $11.8 billion, or about 3.3%, due to higher fuel, interest, feed and labor costs.
The farm business average net income is expected to decline $16,600, or 19.9%, to $66,700 for 2018. This would mark the fourth consecutive year that the average income has declined.
Overall median farm household income is forecast to drop $1,691 to $75,474 for 2018. While overall household income will decline, median off-farm income will go up 2.8% to $69,392.
Despite those income figures, USDA projects farm equity to bump up $21.8 billion to $2.62 trillion. Farm assets will increase 1.2% to $3 trillion, due to an anticipated 1.8% increase in farm real-estate value.
Farm debt is projected to grow by $21.8 billion, or 3.5%, to $406.9 billion, led by a 4.45 increase in real-estate debt.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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