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USDA: Farm Sector Profits Forecast to Decline in 2018
USAgNet - 12/03/2018

Inflation-adjusted U.S. net cash farm income is forecast to decline $10.9 billion, or 10.5 percent, to $93.4 billion in 2018, while U.S. net farm income (a broader measure of farm sector profitability that incorporates non-cash items, including changes in inventories, economic depreciation, and gross imputed rental income) is forecast to decline $10.8 billion to $66.3 billion.

If forecast declines are realized, net cash farm income would be the lowest since 2009; net farm income would be 3.3 percent above its level in 2016. Both profitability measures are forecast below their long-term averages.

The forecast declines are due to a combination of higher production expenses, which are subtracted out in the calculation of net income, as well as a decline in the value of agricultural sector production.

However, direct Government farm payments are forecast to increase $1.8 billion to $13.6 billion in 2018, reflecting higher anticipated payments for supplemental and ad hoc disaster assistance and miscellaneous programs, including Market Facilitation Program payments to assist farmers in response to trade disruptions.

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