Date of this Version
Cornhusker Economics, University of Nebraska-Lincoln, May 14, 2014
After several years of growing agricultural prosperity and record net farm income that peaked at $130 billion in 2013, average United States net farm income is forecast to drop more than 25 percent, to just under $96 billion for 2014 (United States Department of Agriculture (USDA) Economic Research Service). The large drop from 2013 to 2014 after nearly a decade of strong growth in agricultural income presents a new challenge to agricultural producers, and an increased need to carefully manage risk on the farm or ranch. The drop is buffered in part by the underlying strength of the agricultural sector. Farm income is still relatively strong, as the $96 billion forecast remains above the ten-year average of $87.9 billion. The farm balance sheet is in good shape as well, with a debt-asset ratio of 10.5 percent, the strongest farm financial position since USDA started tracking data in 1960 (USDA-ERS). Similarly, farmland values have grown exponentially, with U.S. average farmland values rising more than eight percent per year in the 2003-2013 period (USDA National Agricultural Statistics Service), before reports of more modest changes into 2014.