All of those well-published figures about increased net farm income expected this year seem to hide reality, says Stu Ellis, editor of the farm gate blog. Most of the increase in net farm income will come from the livestock sector. That means profitability growth will be small to non-existent for grain farmers. But beyond the billions of dollars in commodity income and billions of dollars in expenses paid is the impact on the individual farm family budget.
Economists say farm family budgets are either very solid or very weak and 5 to 8 percent of farm families have negative household income each year, and there is a larger percentage of farm families in the poverty level than the percentage of non-farm households. “In brief, farm income is highly variable from year to year,” he says.
Farm families have not always enjoyed higher standards of living, and have only surpassed the general U.S. population in the 1980’s, Ellis notes. But that has not come without a large dichotomy between the upper and lower ends of the wealth scale of farmers. “Compared to the general population, wealthy farmers are more wealthy and poor farmers are more poor, particularly those which are considered large farmers,” he says. “When it comes to expenditures, farm families spend about the same amount of money as the general population, but spend less in both good and bad times for family income levels.”
Source: the farm gate blog