Net farm income is forecast to be $95.8 billion in 2014, down 26.6 percent from 2013’s forecast of $130.5 billion. The 2014 forecast would be the lowest since 2010, but would remain $8 billion above the previous 10-year average. Lower crop cash receipts, and, to a lesser degree, a change in the value of crop inventories and reduced government farm payments, drive the expected drop in net farm income. Net cash income is forecast at $101.9 billion, down almost 22 percent from the 2013 forecast. Net cash income is projected to decline less than net farm income primarily because it reflects the sale of more than $6 billion in carryover stocks from 2013.
Crop receipts are expected to decrease more than 12 percent in 2014, led by a projected $11-billion decline in corn receipts and a $6-billion decline in soybean receipts. Livestock receipts are forecast to increase in 2014 largely due to higher milk prices. The elimination of direct payments under the Agricultural Act of 2014 and uncertainty regarding enrollment and payments during 2014 result in a projected 45-percent decline in government payments. On the other hand, total production expenses are forecast to decline $3.9 billion in 2014, which would be only the second time expenses declined in the last 10 years.
The rate of growth in farm assets, debt and equity is forecast to slow in 2014 compared to recent years. The slowdown in growth is a result of expected lower net income, higher borrowing costs, and moderation in the growth of farmland values. As a result, the value of farm assets is expected to rise 2.4 percent in 2014, while farm sector debt is expected to increase 2.3 percent. This represents a noticeable reduction in the average annual growth in each of these measures compared with the last 10 years. Nonetheless, the historically low levels of debt relative to assets and equity reaffirm the sector’s strong financial position
Tuesday February 11, 2014/ ERS-USDA/ United States.