USDA expects dips in farm sector to continue
Cash receipts are forecast to fall $25.7 billion (6.8 percent) in 2016, led by an $18.7-billion (9.8 percent) drop in animal/product receipts and a $7.1-billion (3.7 percent) decline in crop receipts. Nearly all major animal specialties—including dairy, meat animals, and poultry/eggs— are forecast to have lower receipts, as are feed crops and vegetables/melons, down $3.2 billion (5.5 percent) and $1.5 billion (7.5 percent), respectively. Direct government farm program payments are projected to rise $2.7 billion (24.8 percent) to $13.5 billion in 2016, in part due to the expected price environment.
Farm asset values are forecast to decline by 2.2 percent in 2016, and farm debt is forecast to decrease by 0.8 percent. Farm sector equity, the net measure of assets and debt, is forecast to be down by $61.2 billion (2.4 percent) in 2016. The decline in assets reflects a 1.5-percent drop in the value of farm real estate, as well as declines in animal/product inventories, financial assets, and machinery/vehicles. The decline in farm debt is driven by lower non-real estate debt (down 4.6 percent), reflecting a change in farmers’ management decisions (such as reducing input expenditures) but also an increase in short-term commercial bank loan rates, which make debt more expensive.
Source: USDA