US slashes forecast for 2015 farm incomes
time:2015-09-11 publisher:
U.S. farm incomes will drop by more than half from their peak two
years ago, according to U.S. Department of Agriculture estimates issued
on Tuesday that signal deeper pain for sellers of agricultural equipment
and land.
The USDA projected farm incomes this year will drop by 36 percent
from 2014 to $58.3 billion due to declining crop and livestock prices.
The forecast is down 20 percent from the USDA’s February estimate of
$73.6 billion.
Despite the sharp decline, U.S. Agriculture Secretary Tom Vilsack
called the forecast “heartening.” He noted the United States this year
suffered its worst-ever animal disease outbreak with bird flu in
poultry, and has grappled with severe drought in the West.
If realized, the decline would bring farm incomes to their lowest
level since 2002 when adjusted for inflation, the USDA said. Income will
be down about 53 percent from a record high of $123.7 billion in 2013,
when crop supplies were tighter.
Corn futures have lost about 30 percent on the Chicago Board of
Trade over the past two years following bumper harvests in the Farm
Belt, while soybean futures are down about 37 percent.
The USDA’s forecast for reduced incomes “confirms the deteriorating
fundamentals in the farm economy,” JP Morgan analyst Ann Duignan said
in a note.
Deere & Co, the largest maker of farm equipment, said last week
that weak commodity prices and falling farm incomes were continuing to
hurt demand for agricultural machinery. The company reported that
third-quarter profit tumbled 40 percent and gave a bleaker forecast for
fourth-quarter sales.
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