During a House Agriculture Committee hearing, USDA Chief Economist Rob Johansson told lawmakers farm income is expected to remain flat in 2017. “We’ve seen land values and cash rents decline last year. Evidence suggests those will continue to decline in 2017. The rate of decline remains relatively slow. Recent data from the Federal Reserve Banks indicate year-over-year declines of between one-and-one-eighth percent with ag land values. Many producers face difficulties with low commodity prices, as operating costs have not fallen as far or quickly as prices.” Johansson says some producers can rely on capital reserves; but, to those new to farming, that’s no longer an option. Interest rates are still low, and farmland values declining somewhat slowly. As a result, farm debt presents a lower risk to agriculture than it did in the 1980s.
USDA has released its annual forecast, projecting the next ten years in agriculture. USDA economist David Stallings coordinates this report and said the farm industry is re-adjusting after record income in 2014. He stated, “We do have net cash income and net farm income continuing to fall from our recent record highs. Net cash income declines through 2019 before remaining steady. Net farm income declines in 2017 and then increases back to 2016 levels in the later years of the projection period.” Stallings says the total acreage devoted to crop production will decline over the next ten years