Responding to the latest Farm and Financial Income Forecast released by USDA's Economic Research Service, Agriculture Secretary, Tom Vilsack, gave credit to “the unique ability of American farmers and ranchers to plan ahead and make sharp business decisions in a challenging market.”
Vilsack provided key details from the report, noting in particular a big boost in the forecast for 2015 net farm income, which was revised up significantly to $80.7 billion-an increase of 43 percent since the February forecast.
There were some not-so-rosy figures in the forecast, including a predicted decline in net farm income for 2016, down 11.5% from the 2015 estimate. If realized, it would be the lowest since 2009. Cash receipts are also forecasted to fall $25.7 billion (6.8%) in 2016, led by an $18.7 billion (9.8%) drop in animal/animal product receipts and a $7.1 billion (3.7%) decline in crop receipts. Farm asset values were also forecasted to decline slightly by 2.2% in 2016, and farm debt is forecast to decrease by 0.8%.
While the report released by USDA's Economic Research Service included several troubling estimates in the far sector for 2016, Vilsack noted that the 2014 Farm Bill will provide for “a comprehensive farm safety net” that will ensure financial stability for America's farming families.
The report forecasts a 25 percent rise in Farm Bill program payments in 2016, under programs including Agriculture Risk Coverage (ARC), Price Loss Coverage (PLC), and the Margin Protection Program for Dairy (MPP), with payments forecast to total $13.5 billion.
"The estimates today also showed that debt to asset and debt to equity ratios—two key indicators of the farm economy's health—continue to be near all-time lows,” said Vilsack, quoting from the report. “In addition to strong balance sheets, median household income for farming families remains near historic highs. In 2016, higher off-farm earnings are expected to help stabilize losses due to low commodity prices.”
Vilsack cited the work of the Obama administration since 2009 as helping to create the upward trend toward strong household income. He pointed to “significant and targeted investments across the United States,” listing areas that include “building a more robust system of production agriculture, expanding foreign markets for U.S. farm goods, bolstering local and regional food systems across the country, and creating a new bio-based economy in rural communities that today supports more than 4 million American jobs.”
Vilsack also noted that rural communities have been on the receiving end of “billions of dollars” to develop schools, hospitals and public safety headquarters, adding that “businesses of all sizes have availed themselves of USDA's business loans and grants to spur growth that complements the agricultural economy.”
The USDA has also invested heavily since 2009 in improving the availability of technology to rural communities. Today, 6 million Americans in these areas enjoy new or improved high-speed Internet service, along with major improvements to their electricity, water and wastewater, and clean power resources.
Finally, Vilsack took pride in pointing out that, “outside the United States, demand for American-grown food and agricultural products remains strong.” According to the forecast, agricultural exports have surpassed $1 trillion since 2009, a figure that beats all other previous records in terms of value and volume. Vilsack said this boom will continue to act as “an engine for America's farm economy, and that the USDA will continue to ensure American farming families have open markets and a level playing field by working to remove unfair barriers to trade and negotiating trade agreements, such as the Trans Pacific Partnership, that benefit all of agriculture."
Just last week, Vilsack noted, farm exports for 2016 were revised up to one of the highest levels on record, demonstrating that U.S. farmers and ranchers continue to beat expectations.
As author, Brian Brett, once said, “Farming is a profession of hope.” Let’s take our cue from Secretary Vilsack’s optimism, and hope for the best in 2016.