November 26, 2008
Net cash income for farmers this year is now expected to total US$90.7 billion, down from an August forecast of US$101.3 billion, according to a report released Tuesday (November 25) by the US Department of Agriculture's Economic Research Service.
The new net cash income forecast for 2008 is still US$3.3 billion or 4 percent above 2007 income, though, the report said.
The value of the crops produced by farmers this year was much higher than in 2007, but the cost of doing business also went up sharply, the USDA economists said in the report.
"The story for 2008 is twofold, with a large increase in the value of crop production that is offset by rising production costs for the farm sector," according to the report. "The value of crop production, at US$181 billion, is forecast to exceed the 2007 record by US$30 billion, or 20 percent."
USDA Secretary Ed Schafer, in a prepared statement released Tuesday, said: "America's agriculture continues a positive growth - a fifth straight year of record crop receipts, historically sound farm asset balance, and the third-highest net cash income over the last 33 years. Farmers remain prudent in their borrowing amid increased costs for seed, fuel and fertilizer."
But the outlook for next year is not as rosy as 2008, Schafer told reporters earlier this month. He said farmers are going to be making less money in 2009 than they did this year thanks to dropping commodity prices and relatively high production expenses.