Farm Sector Profits Set to Decline in 2018

(WASHINGTON, DC) Inflation-adjusted U.S. net cash farm income is forecast to decline 10.5 percent to $93.4 billion in 2018. According to the Economic Research Service (ERS) net farm income, which is a broader measure of farm sector profitability is forecast to decline by more than 14 percent to $66.3 billion. If realized, net cash farm income would fall to the lowest since 2009; net farm income would fall to its lowest level since 2002. Both profitability measures are forecast below their long-term averages. The declines are due to a combination of higher production expenses, which are subtracted out in the calculation of net income, as well as a decline in the value of agricultural sector production. However, government farm payments are forecast to increase this year more than 15 percent to $13.6 billion. The increase is reflecting higher anticipated payments for supplemental and ad hoc disaster assistance and miscellaneous programs, including Market Facilitation Program payments to assist farmers in response to trade disruptions.