{ "id": "R45697", "type": "CRS Report", "typeId": "REPORTS", "number": "R45697", "active": true, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 596706, "date": "2019-04-16", "retrieved": "2019-05-03T14:20:52.467963", "title": "U.S. Farm Income Outlook for 2019", "summary": "This report uses the U.S. Department of Agriculture\u2019s (USDA) farm income projections (as of March 6, 2019) and agricultural trade outlook update (as of February 21, 2019) to describe the U.S. farm economic outlook. According to USDA\u2019s Economic Research Service (ERS), national net farm income\u2014a key indicator of U.S. farm well-being\u2014is forecast at $69.4 billion in 2019, up $6.3 billion (+10%) from last year. The forecast rise in 2019 net farm income is the result of an increase in gross returns (up $8.5 billion or +2%)\u2014including continued payments under the trade aid package announced by USDA in July 2018\u2014partially offset by slightly higher production expenses (up $2.2 billion or +0.6%). Net farm income is calculated on an accrual basis. Net cash income (calculated on a cash-flow basis) is also projected higher in 2019 (+4.7%) to $95.7 billion.\nThe 2019 net farm income forecast is substantially below (-18%) the 10-year average of $84.8 billion (in nominal dollars)\u2014primarily the result of the outlook for continued weak prices for most major crops. Commodity prices are under pressure from a record soybean and near-record corn harvest in 2018, diminished export prospects due to an ongoing trade dispute with China, and burdensome stocks. \nGovernment payments are projected down nearly 17% from 2018 at $11.5 billion\u2014due largely to lower market facilitation payments by USDA. Market facilitation payments to qualifying agricultural producers\u2014in response to the U.S.-China trade dispute\u2014were an estimated $5.2 billion in 2018 and are projected at $3.5 billion in 2019. Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) payments are also projected lower in 2019 ($1.7 billion) versus 2018 ($3.0 billion). Payments to dairy producers under the new Dairy Margin Coverage (DMC) program are projected up over 200% at $600 million, while payments under conservation and disaster assistance are projected up in 2019 at $4.3 billion (+8.6%) and $1.4 billion (+20%).\nSince 2008, U.S. agricultural exports have accounted for a 20% share of U.S. farm and manufactured or processed agricultural sales. In 2018 total agricultural exports were estimated up 2% at $143.4 billion. However, abundant supplies in international markets, strong competition from major foreign competitors, and the ongoing U.S.-China trade dispute are expected to shift trade patterns and lower U.S. export prospects slightly (-1%) in 2019. \nIn addition to the outlook for slightly higher farm income, farm asset value is also projected up 1.5% from 2018 to $3.1 trillion. However, aggregate farm debt is projected record large at $426.7 billion\u2014up 3.9% from 2018. Farm asset values reflect farm investors\u2019 and lenders\u2019 expectations about long-term profitability of farm sector investments. USDA farmland values are projected to rise 1.8% in 2019, similar to the increases of 1.9% in 2018 and 2.3% in 2017. Because they comprise such a significant portion of the U.S. farm sector\u2019s asset base (83%), change in farmland values is a critical barometer of the farm sector\u2019s financial performance. At the farm household level, average farm household incomes have been well above average U.S. household incomes since the late 1990s. However, that advantage has narrowed in recent years. In 2014, the average farm household income (including off-farm income sources) was about 77% higher than the average U.S. household income. In 2017 (the last year with comparable data), that advantage is expected to decline to 32%.\nThe outlook for below average net farm income and relatively weak prices for most major program crops signals the likelihood of continued relatively lean times ahead. The U.S. agricultural sector\u2019s well-being remains dependent on continued growth in domestic and foreign demand to sustain prices at current modest levels. In addition to commodity prices, the financial picture for the agricultural sector as a whole heading into 2019 will hinge on both domestic and international macroeconomic factors, including interest rates, economic growth, and consumer demand.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R45697", "sha1": "e971612c7088c80bed2209520b4aa27f58bd0680", "filename": "files/20190416_R45697_e971612c7088c80bed2209520b4aa27f58bd0680.html", "images": { "/products/Getimages/?directory=R/html/R45697_files&id=/8.png": "files/20190416_R45697_images_a2839b58d85f2e72a645481b5d4317936157b78b.png", "/products/Getimages/?directory=R/html/R45697_files&id=/26.png": "files/20190416_R45697_images_9097dabb23a614a6174b428137579094197b126e.png", "/products/Getimages/?directory=R/html/R45697_files&id=/11.png": "files/20190416_R45697_images_44eb8950b7b21edde32de0aa3e14bad63534fdd9.png", 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