Field Silo & Equipment



National & World Ag News Headlines
U.S. Farm Economy Still Lagging
USAgNet - 09/29/2016

In August, expectations for 2016 farm income were revised up modestly from the February forecast, but income was still expected to decline notably from a year ago. The USDA's August revision can be interpreted as both positive and negative for the farm sector, according to the Federak Reserve Bank of Kansas City. On the positive side, farm income expectations for 2015 and 2016 were revised up by 43 percent and 31 percent, respectively. On the negative side, however, the expected decline in farm income from 2015 to 2016 widened from 3 percent earlier in the year to 11 percent in the most recent report.

Essentially, farm income was higher than initially forecasted, but the deterioration from a year ago is now believed to be sharper than expected.

The improvement in farm income expectations was largely due to downward revisions in production costs for the farm sector as revenue expectations continued to weaken. Whereas cash receipts in the crop sector generally were expected to remain unchanged in February, the revision in August pointed to a decline of about 4 percent from a year ago. Similarly, in the livestock sector, the August report predicted a 10 percent drop in cash receipts from a year ago, slightly more than expected in February. Production costs for 2016, however, were also revised lower and more than offset the more pessimistic outlook for revenue. Total production expenses in the farm sector were anticipated to be more than 7 percent less than expected earlier in the year, with much of this adjustment coming from a reduction in capital outlays.

Although U.S. farm income expectations were revised up in August, profit margins for many producers of major U.S. agricultural commodities weakened significantly in the third quarter. In the crop sector, the range of average monthly prices throughout 2016 has left very few opportunities for producers to sell at a profit.

Since 2013, profit margins have dropped precipitously for corn, soybeans, wheat, and cotton, and both wheat and corn prices were hovering at or near 10-year lows in September.


Other National Headlines
Real Wisconsin Cheese Curds
Grand View Safety Grooving
Copyright © 2024 - Farms.com. All Rights Reserved.