The dairy industry is not alone in suffering through 2009.
USDA’s Economic Research Services (ERS) forecasts a 38% decline in the nation’s net farm income this year.
U.S. farming income is expected to drop to $54 billion in 2009, down $33.2 billion from ERS’ preliminary estimate of $87.2 billion for 2008. The 2009 forecast is $9 billion below the average of $63.2 billion in net farm income earned in the previous 10 years.
“In 2009, crop prices have continued to decline and prices for livestock animals and products have experienced sharp declines,” ERS notes. “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, ERS says. Overall, the reduction in gross income will far exceed the reduction in production costs, leaving all net measures of income and output below the record or near record levels established in 2008.
Learn more at: http://www.ers.usda.gov/Features/FarmIncome/
Catherine Merlo is Western editor for Dairy Today. You can reach her at cmerlo@farmjournal.com.
