January 2020 - 6

EDITOR'S LETTER
Aid drives US farm income
Most growers would adamantly
prefer to make a living without
government subsidies. The current
era of political and market turmoil
- along with damaging weather
challenges - take that option out of
a lot of farmers' control. Like it or
not, recent numbers bear that out.
Late-year projections indicated
farm earnings were expected to rise
more than 10% in 2019, but nearly
a third of producers' net income
came from crop insurance benefits
and direct government payments,
including the Trump administration's
trade assistance.
Vegetable
Growers
News.com
WATCH. READ. SHARE
VEGETABLEGROWERSNEWS.COM
USDA: Farm agritourism dollars tripled
2002-2017
Gary Pullano
Managing Editor
Net farm income, a broad measure of profits, was expected to
rise to $92.5 billion for 2019, a $8.5-billion increase over 2018,
USDA's Economic Research Service (ERS) reported Nov. 27. Some
31% of that income will come from government payments and crop
insurance benefits, said ERS economist Carrie Litkowski.
Vegetable and melon cash receipts were expected to rise
$1.9 billion (10%) in 2019, partly due to a forecast increase
in potato receipts of $0.2 billion (6.4%). Cash receipts for fruits and
nuts were expected to rise $0.4 billion (1.3%) in 2019.
Farmers were expected to get $14.3 billion in 2019 from the
Market Facilitation Program (MFP), which was created last year to
compensate farmers for the impact of President Donald Trump's
trade wars. MFP will account for more than half of the $22.4
billion in direct government payments estimated for 2019. In 2018,
government payments totaled $13.7 billion.
Crop insurance indemnities, less premiums, were expected to total
$6.5 billion for 2019, the highest level since 2013, reflecting the
widespread weather problems this year, said Litkowski.
Another measure of farm profitability, net cash farm income,
was forecast to reach $119 billion in 2019, a 15% increase, or $15.5
billion, from 2018. Net cash farm income includes cash receipts from
farming along with farm-related income, including government
payments, less cash expenses. It doesn't include non-cash expenses
such as depreciation.
The farm economy looked stronger in 2019 when the estimates are
limited to commercial farms.
Farms that have an annual gross cash farm income of more than
$350,000 and smaller operations where farming is reported as the
operator's primary occupation, were expected to average $91,800 in
net cash farm income in 2019, a 19.5% increase from 2018. It would
be the first annual increase after four consecutive years of declines
for those operations.
Those commercial farms, which ERS defines as " farm businesses, "
account for less than half of total U.S. farms but 90% of total
production. They also hold most of the sector's assets and debt.
The latest forecast of total net farm income for all of U.S.
agriculture was $4.5 billion higher than the August estimate of $88
billion, in part due to the second tranche of MFP payments released
in November.
The economists raised their estimate for net crop cash receipts
by $3.7 billion from August. They are now expected to rise by $1.9
billion, or 1%, from 2018 levels. In August, USDA projected farmers'
crop profits would drop by $3.3 billion, or 1.7%
Net crop cash receipts are estimated to reach $197.4 billion in
2019, which would be the highest level since that reached $212
billion in 2014.
Recent economic conditions have raised concerns about the financial
health of the U.S. farm sector. After peaking around 2012, farm sector
income declined while farm debt continued to rise. Farm real estate is
no longer rapidly appreciating in value, and land prices have declined
in some regions. Between 2016 and early 2019, interest rates rose -
increasing the cost of borrowing for some farmers.
According to a report released by ERS in October, lower commodity
prices in the near future would make it more difficult for some
farmers to meet their loan obligations and pay for production
expenses. Farmers who made substantial investments in land or
machinery when commodity prices and farm incomes were high
could face elevated risks of financial insolvency.
The agricultural economy is traditionally resilient and steadfast. So
too should be the public and private sector structures that hold the
industry in place.
Ag groups back advancement of ag
immigration bill
The Farm Workforce Modernization
Act of 2019 received House Judiciary
Committee approval Nov. 20.
Adjusted for inflation, agritourism
revenue grew from $704 million in 2012
to almost $950 million in 2017.
E. coli outbreak linked to Salinas, California,
romaine lettuce
Romaine lettuce that was harvested
outside of the Salinas region was not
initially implicated in this outbreak
investigation.
Wilbur-Ellis buys Nachurs Alpine Solutions
Wilbur-Ellis on Nov. 20 announced
the acquisition of Nachurs Alpine
Solutions, a specialty liquid chemical
manufacturer.
4 | VegetableGrowersNews.com
http://www.News.com http://www.VEGETABLEGROWERSNEWS.COM http://www.VegetableGrowersNews.com
January 2020

Table of Contents for the Digital Edition of January 2020
