Farmers, who don’ t need any more bad news, got a double dose this week.
On Tuesday, the U.S. Department of Agriculture predicted that net farm income nationally will drop to $62.3 billion this year, down nearly 9 percent from last year.
If that prediction proves accurate, it will mean income will be barely half of the record $123 billion in 2013. It also means that on an inflation-adjusted basis, net farm income will hit its lowest level since 2002, according to USDA.
On Thursday, The Federal Reserve Bank of Kansas City released its fourth-quarter ag credit survey, which shows a continuing slump in farmland values.
On average, nonirrigated and irrigated farmland values dropped 6 percent in the Fed’s 10th District, and ranchland values fell 7 percent from the same period last year, according to the report.
Conditions were worse in Nebraska, according to the report, which had the highest decline of any state in the district in the value of irrigated farmland compared with a year ago — 8 percent — and tied with Kansas for the biggest drop in ranchland value at 10 percent. The state’s drop in the value of non-irrigated farmland was 4 percent, which was lower than the district average of 6 percent.
Three-fourths of bankers responding to a survey as part of the report said they expect the decline in values to continue in 2017 while 70 percent said they expect farm income, which declined in the fourth quarter for the 15th straight quarter, to continue to decline this year.