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Farm income looks grim again this year

by Ben Nuelle

Farm sector profitability expects to fall for the third year in a row.

USDA’s Economic Research Service released the Farm Sector Income Forecast for 2016 and things don’t look good.

Iowa Agriculture Secretary Bill Northey says we’re at a much more challenging time than what we have been the last ten years.

“As we headed up to those higher prices 10 years ago it was a pretty easy time to work. Now has been a time where many Iowa producers with big yields probably had a net loss on their net income statement this last year and probably means this next year will as well. We’re seeing that with both crops and livestock so that has an impact off the farm. Our Ag businesses that sell things to our farmers are really financially challenged as well.”

Northey believes this will also affect crop insurance.

“As you look at crop insurance guarantees. My understanding is likely to see the current crop insurance guarantee be the lowest it’s been in ten years. It’s a time that we are struggling but a time that we’ll get through. We’ve been through tougher times than this but there are going to be some consequences,” Northey says.

Net cash farm income is forecast at $90.9 billion, down about 2.5 percent from the 2015 forecast levels. Net farm income is forecast to be $54.8 billion in 2016, down 3 percent. 2016 net farm income would be the lowest since 2002 (in both real and nominal terms) and a drop of 56 percent from its recent high of $123.3 billion in 2013.

Read more of the report here.