To no one’s surprise, net farm income is forecast to be $57 billion in 2009, down $30 billion (34.5 percent) from 2008. The 2009 forecast is $6.5 billion below the average of $63.6 billion in net farm income earned in the previous 10 years. Still, the net farm income forecast for 2009 remains the eighth largest amount of income earned in U.S. farming. The top five earnings years have been tightly grouped between 2003 and 2008, attesting to the profitability of farming this decade.
In 2009, crop prices have continued to decline and prices for livestock animals and products have experienced sharp declines. With economic conditions deteriorating worldwide, demand for exports has tailed off, with few options available to expand marketing elsewhere. Sharply declining demand in 2009 has forced farmers to accept prices that are lower than were expected earlier in the year when production plans were made.
On the input side, prices are also projected to be lower than in 2008, particularly for most manufactured inputs, feed, and services such as repairs or transportation. Overall, the reduction in gross income will exceed the reduction in production costs by $30 billion, leaving all net measures of income and output below the record or near-record levels established in 2008.