Farm income Picture Continues to Look Bleak
Source: By Gary Truitt, Hoosier Ag • Posted: Wednesday, September 9, 2015
As Indiana farmers know all too well, drops in commodity prices are the main reason. However, according to Young, there are additional factors, “We’re also seeing, though, at the same time, some noticeable declines in milk prices as well, so the livestock sector that before had pulled the overall numbers up is just not there either this year. We’ve also seen cash expenses haven’t moved much at all, just contributing to dragging this overall number down.” The USDA has forecast a more than 9% decrease in livestock receipts, thanks largely to a decline in dairy and hog revenues amid increasing production of both milk and pork as well as lower prices. Revenue from broiler chickens is also expected to decline as export bans linked to a highly contagious strain of bird flu increase U.S. inventories and push prices lower, the government said. Government forecasters expect a 29% drop in dairy receipts in 2015, as well as a 27% decline for hogs.
We are seeing some decline in production costs. The USDA is forecasting a 3% drop in input costs, the first time we have seen that since 2009. Yet, Young says it is going to be a rough economic ride for most farmers for the next few years, “I think we are going to have to talk about having open and frank conversations with our landlords as we work on cash rents and share rent rates and things of that nature. Also going to need to have conversations with other input suppliers, take advantage of any kind of downward price moves that might show up this fall or early spring on some of those input cost. It’s just going to be a period of really watching every jot and tittle on the balance sheet as we move forward.”