farm income

USDA’s Economic Research Service (ERS) recently released its Farm Income forecast for 2016.  Net cash income and net farm income (which includes the value and costs of items like depreciation, home consumption of farm goods, and unsold inventory) are both expected to fall slightly compared to 2015, but by much less than last year. Net cash income is expected to fall by 2.5%, or about $2.3 billion, and net farm income by 3%, or about $1.6 billion. Last year net cash income fell by 27% and net farm income by 38%.

A large portion of the forecast decline is from lower livestock receipts, expected to be down by about $7.9 billion. Crop receipts are also forecast to be lower by $1.6 billion. On the other hand, input costs are forecast to be down by $3.8 billion, and government payments are expected to be $3.3 billion higher.

Policy makers, economists, the farm and food industry, consumer advocates, and others rely on USDA’s food price outlook and farm sector income and finances data in their decision making and planning.  At this year’s Forum, two sessions focus on these closely watched USDA forecasts and present the latest analysis and projections.

A session on the Farm Income Outlook for 2015 focuses on general measures of the financial well-being of the farm economy. The analyses and data released by the Economic Research Service (ERS) and used by USDA and others in both the public and private sector provide insights about the financial health of the U.S. agricultural economy. Financial performance measures assess the farm sector's receipts and expenses; net income; variations in farm income by farm size and other categorizations; and changes in the sector's wealth holdings. ERS estimates and forecasts of farm income and wealth are based on information collected across USDA and other parts of government, as well as responses to USDA's annual Agricultural Resource Management Survey (ARMS) and other sector-level information.

Here’s what the Economic Research Service (ERS) has in store for the Agricultural Outlook Forum. We have arranged two afternoon sessions on Thursday, February 20.  One will discuss farm income and the other the outlook for food prices.

The food price session, moderated by Michael McConnell of Informa Economics, will provide a perspective on food price inflation, the main factors that contribute to food price movements, and the implications for consumers in the United States and abroad. ERS economist Richard Volpe will present the latest outlook for retail food prices, recent trends in food expenditure patterns, and general-economy considerations. Another ERS economist, Ron Trostle, will discuss the volatility in commodity prices in recent years, and the impacts on food prices. And Keith Wiebe, Senior Research Fellow at the International Food Policy Research Institute (IFPRI), will address the implications of food prices for global food security.

This post is part of the Science Tuesday feature series on the USDA blog. Check back each week as we showcase stories and news from USDA’s rich science and research portfolio.

With the abundance of news and information on the food and agriculture sector, sometimes it is helpful to take a step back and look at the big picture. You might be a seasoned expert on food, agriculture, or the rural economy, or you may have just a general knowledge. In any case, there are a number of key indicators that will bring you up to speed on a range of basic questions.

How much, for example, do agriculture and related industries contribute to the U.S. economy? Which commodities are our main agricultural exports? What share of their household incomes do Americans spend on food? How do job earnings in rural areas compare with metro areas? How much of our Nation’s water does agriculture consume?

USDA programs have targeted assistance to beginning farmers and ranchers since the 1992 Agricultural Credit Improvement Act. Farms or ranches are considered “beginning” if the operators have managed them for 10 years or less. The Economic Research Service has looked at the trend in numbers of beginning farmers and ranchers in recent decades and examined some key characteristics that distinguish them from established farms using the Census of Agriculture and the Agricultural Resource Management Survey. Taken every five years, the Census provides the only source of uniform, comprehensive and impartial agricultural data for every county in the nation.

For more than two decades, the share of farms operated by beginning farmers has been in decline.  Beginning farms and ranches accounted for 22 percent of the nation’s 2 million family farms and ranches in 2011 – down from about 38 percent in 1982. Consistent with this trend, the average age of principal farm operators in the United States has risen in that period, from 50 to 58.

USDA’s 2013 Agricultural Outlook Forum, Feb. 21-22, in Arlington, Va., will host a morning of plenary session speakers on the opening day followed by 25 breakout sessions.  The “Food Price Outlook” breakout session for 2013 will offer perspectives on food price inflation, the factors contributing to food prices, and the consumer implications.

About midway through USDA’s 150-year history, federal officials decided that economic research and analysis could be a valuable, objective tool in helping farmers – and policymakers - grapple with farm price and income issues. In 1922, the Bureau of Agricultural Economics (BAE) – predecessor agency of USDA’s Economic Research Service (ERS) – came into existence. The Bureau began regularly producing agricultural market outlook reports (still an ERS staple), and - not surprisingly - its early work included analysis of agricultural policy impacts during the Great Depression.

Although the BAE’s functions were dispersed throughout the Department in the 1950s, they were assembled again into a single agency, the Economic Research Service, in 1961.  I’ll touch on just a few highlights of ERS activities that illustrate the value of our agency’s work over the past century.