Farm Income Down

Rabobank’s Farm & Ranch Survey reports that less than 5% of farms saw an improvement in income this year, a downturn compared to the same time last year, when one in four farms saw better year over year income, AgriMarketing reports. Farmers who owned or operated a farm grossing $250,000 or more in one of three U.S. census regions; the Midwest, Southern and Western U.S., were targeted in the survey.

Concern about the U.S. agricultural economy remains with 95% of those surveyed, falling within the range of somewhat concerned at 34%, very concerned at 30%, to extremely concerned 31%. Fifty-four percent of farmers expect the economy to continue to worsen.

Hiring plans are relatively unchanged, with three-quarters of farms expecting hiring levels to be the same as last year. Additionally, 66% of those surveyed have no plans to purchase farm equipment. However, farms in operation 40 years or more are planning to buy equipment compared to newer farms.

Regardless of acreage, U.S. producers are more distressed regarding their income. Approximately 40% believe their income will be worse next year, when compared with previous surveys. However, 27% of respondents have some optimism that their income will improve. Additionally, higher input costs continue to be the most frequently mentioned economic challenge facing U.S. farmers. Three in five farmers rank it the primary factor that has contributed most to the economic challenge they are confronted with. And 55% have concerns regarding reduced demand and 57% are concerned about weather conditions.

Out of nearly all surveyed, 94% are concerned about price fluctuations. What seems somewhat positive is that the degree of concern has lessened. Those extremely concerned dropped from 62% to 48%. To manage that concern, 45% have implemented or plan on investing in risk management or marketing strategies.

In terms of land purchases, nine in 10 plan to keep farms the same size. The only change in land seems to be a slight increase in those who plan to sell land — 5% versus 2% in the survey earlier this year.