Latest Numbers Tell Familiar Story: Ag Struggling

Whether the information comes from academia, the Fed, USDA, or a trade association, the news is consistent: These are tough times for ag.

Reports from several sources contain numbers that confirm the economic slide that has been apparent to members for many months, although buried within the bad news is an occasional note of optimism.

The Economic Research Service for the USDA reports that net farm income will be down 36% this year, which is the biggest single-year drop since 1983. Net cash income is expected to fall by 28%.

A quarterly report from the Federal Reserve Bank in Kansas City said that although the Fed has seen declines in farm incomes for several consecutive quarters, the drop in the recent third quarter is “especially severe.”

November results from Creighton University’s monthly Rural Mainstreet Index—a survey of bank CEOs in small towns dependent upon agriculture and energy—also show grim numbers. On a scale of zero to 100, with 50 being growth neutral, the farm equipment sales index was 14.2, which Creighton characterizes as “very weak,” although an improvement from the record-low reading in October of 10.8.

The monthly report from the Association of Equipment Manufacturers shows that buyers in the market for small tractors continue to spend.

U.S. retail sales of tractors under 40HP increased 23.3% in October compared to the same month last year.

Year-over-year, retail sales of two-wheel drive tractors, including the under-40HP, increased by 5.8% in 2015. Sales of tractors between 40HP and 100HP remained flat. S