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Rising costs put further pressure on farm finances

Analysis by the Food and Agriculture Policy Research Institute indicates a drop in farm income even considering government market facilitation program payments.

“Net farm income today is roughly half the level it was at the peak,” said Dr. Pat Westhoff, director of FAPRI. “That’s caused continued stress for a lot of the famers around the country; we’re looking at debt/asset ratios rising and a variety of other indicators.”

The USDA’s income projection is lower than FAPRI’s because FAPRI’s includes trade mitigation payments; USDA’s does not, said Westhoff.

“Of that $12 billion total possible, only about $6 billion have actually formally been committed,” he said, “with the market facilitation payments being about $4.7 billion of that total, and another billion or so in purchases and other support to the sector.”

Putting further pressure on farm finances, the FAPRI Baseline Update says higher costs for fuel, feed and labor contribute to a $10 billion increase in 2018 production expense projections.

AUDIO: Pat Westhoff (5 min. MP3)