Expected drop in farm income highlights need for biofuels, RFS

Source: By Erin Voegele, Ethanol Producer Magazine • Posted: Thursday, February 15, 2018

The USDA’s February 2018 Farm Income Forecast predicts net farm income will decline by or 6.7 percent this year. According to Growth Energy, the expected drop underscores the need for a strong Renewable Fuel Standard.

The USDA’s forecast currently predicts net farm income will decrease $4.3 billion, or 6.7 percent, from 2017, falling to $59.5 billion this year. That is the lowest net farm income level in nominal dollar terms since 2006, the USDA said. Net cash farm income is expected to fall by $5 billion, or 5.1 percent, reaching $91.9 billion, the lowest level since 2009.

In inflation-adjusted (real) 2018 dollars, the USDA indicated net farm income is forecast to decline $5.4 billion, or 8.3 percent, from 2017. If realized, the drop would be represent the lowest real-dollar level since 2002. Real net cash farm income is expected to decline $6.7 billion, or 6.8 percent, from 2017, which would be the lowest real-dollar level since 2009.

According to the USDA, the 2018 forecast for farm business average net cash farm income is $93,200, the fourth consecutive decline since 2014 and the lowest average since 2011, in nominal dollars.

Farm debit is expected to increase by $3.8 billion, and cash receipts for corn are forecast to fall by $1.9 billion, reflecting a decline in corn prices that has continued without relief since 2012.

“Rural communities are falling further behind, and many farmers are wondering if this next harvest will be their last,” Emily Skor, CEO of Growth Energy. “The latest figures show farm income hitting a 12-year low, with debt mounting in the face of a global crop surplus. The RFS remains the single most promising tool available to revitalize rural growth and provide a key outlet for the multi-year crop surplus. To make that happen, it’s vital that policymakers reject attempts by a handful of refineries to pull the rug out from under America’s farmers by limiting the growth of biofuels.”

“Voters trusted this administration with the power to launch a new wave of growth across rural America, and now is the time to deliver on that promise,” Skor continued. “We cannot leave rural economies in the U.S. to decline or stagnate as they did during the 1980s. We’re grateful to President Trump for his long-standing commitment to the RFS and urge him to stand strong against misguided attempts to undermine rural growth.”