Net Farm Income Forecast To Drop 34.5 Percent

Information provided by USDA Economic Research Service

Above: Equals annual average price for crops.

Highlights

• Net cash income is expected to fall about 28 percent, to a level just below its previous 10-year average.

• Net value added, at $108.4 billion, is expected to fall from a record $135.7 billion in 2008, but remain above its 10-year average. Some of the decline in value of production is offset by the the drop in expenditures for purchased inputs.

• Net farm income, which was a near-record $87.1 billion in 2008, is expected to be $6.5 billion below its 10-year average in 2009 as a result of reduced net value added and increased payments to stakeholders.

* Total expenses are forecast to decline for the first time since 2002.

• The 2007 and 2008 increases in farm expenses, at $34.8 billion and $22.5 billion, were the largest year-over-year absolute changes on record.

• The $11.9-billion decline in expenses projected for 2009 would still leave farm expenses 4 percent higher than in 2007.

* The 2009 forecast is for a 13 percent decline in cash receipts.

• The $42.1-billion decline represents about half the combined increase of $83 billion that occurred over 2007 and 2008.

• Crop receipts would be the second highest on record in 2009, despite a $19.4-billion drop to $163.6 billion, following gains of more than 20 percent in each of the last 2 years.

• Livestock receipts are expected to decline $22.7 billion (16.1 percent) in 2009.

* Government payments are forecast to change little in 2009.

– The projected decline in ad hoc and emergency assistance payments is offset by increases in Milk Income Loss and countercyclical payments.

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