US farm profits seen down 34.5 percent this year

Farmers in the US will see their profits shrink by 34.5 percent this year from 2008 because of lower grain and livestock prices, according to a report by the USDA.

The figure is a downward revision of an April forecast of a 20-percent drop in net income.

The report said net farm income will reach US$57 billion this year, down US$30 billion from last year and down from the US$63.6 billion average for the past 10 years.

Iowa's total net farm income in 2008 was US$7 billion on cash receipts of about US$26 billion. A 34.5-percent decline in national net farm income would translate to a net farm income of US$4.6 billion for Iowa this year.

Livestock producers will take the biggest hit, as the cash value of their work will drop US$22.7 billion nationally, said the report.

Prices for hogs, for which Iowa is the nation's largest producer, have fallen from about US$1 per pound a year ago to 58 cents per pound.

Cattle prices have dropped during the last year from about US$1.20 per pound to 85 cents per pound, mainly because of a drop in demand for steak and other choice cuts.

Milk prices have increased recently from 11 cents per pound to around 14 cents, but prices still are down from more than 20 cents per pound in 2008 because of a drop in exports.

The USDA said grain crop receipts will be down US$19.4 billion nationally this year, mainly because of lower prices.