USDA Says 2009 Farm Income Will be Down!
The USDA reported on their website on Thursday that they expect net farm income for 2009 to be $54.0 billion down from the record 2008 preliminary estimate of $87.2 billion. This equates to a net decrease in farm income of $33.2 billion or an over 38% decrease. What is even more disheartening is that the net income will be about $9.0 billion below the 10 year average net farm income of $63.2 billion.
Net cash income is forecasted at $68.2 billion which is about $29.4 billion down from 2008 and $3 billion below the 10 year average. Net farm income reflects only income from production in this year, while net cash income includes sales of crops from 2008 in 2009.
Some good news is that farm expenses are expected to be down $9.2 billion to $25.6 billion. However, the 2008 expenses were at an all time high and 2009 expenses are still about 5% higher than 2007. This is the first year over year decline since 2002.
Crop receipts are expected to be in the $165 billion range which is an $18 billion drop from the all time high in 2008, but still the second highest of all time.
Government payments are expected to be about $12.6 billion which is about the same as 2008.
These are challenging times for all farmers and businesses. The good news is that expenses are down, the bad news is that income is down even more. Now is the time to make sure your marketing program is sound and that you have the appropriate tight controls on your expenses. Make sure that the cash rent you are paying is the correct amount for these new revenue numbers.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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