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After several years of growing agricultural prosperity and U.S. net farm income that peaked at almost $124 billion in 2013, the most recent forecast from UDSA's Economic Research Service projects net farm income at less than $70 billion for 2019. The six-year cumulative decline since 2013 is primarily due to a drop in commodity prices, a result of growing supplies, and more recently, trade conflicts and declining exports for key commodities. While the aggregate financial position of U.S. agriculture remains relatively strong with an aggregate debt-asset ratio of less than 14% (USDA-ERS, 2019), total debt has grown while profit margins have shrunk, putting more pressure on management decisions and putting more operations at financial risk.
Managing tighter profit margins and the underlying production, market, and financial risks will be a critical part of working through the current economic environment. Legal risks and human risks, whether from changing farm programs, trade polices, or regulatory requirements or from the continued aging of the farm population and growing transition needs, must also be addressed. Educating producers to manage these risks and position their farm or ranch for future growth and success is the fundamental purpose of the Extension Risk Management Education (ERME) program.