Author: Randy Schnepf, Specialist in Agricultural Policy
According to USDA’s Economic Research Service (ERS), national net farm income-a key indicator of U.S. farm well-being-is forecast at $113.2 billion in 2014, down 14% from last year’s record $131.3 billion. The 2014 forecast would be the lowest since 2010, but would remain $25 billion above the previous 10-year average. The forecast for lower net farm income and net cash income is primarily a result of the outlook for lower crop receipts and government payments. In contrast, livestock returns are forecast to be up 15% on the strength of record prices. The 2014 farm bill (Agricultural Act of 2014; P.L. 113- 79) eliminated direct payments of nearly $5 billion per year, while market prices for program crops-despite their plunge since late 2013-are expected to remain above trigger levels for most price-contingent programs (peanuts and rice being the exceptions), thus keeping government program support at the level since 1997. U.S. agricultural exports are forecast to grow in importance for the sector as expanding international economies are expected to lead to continued increases in demand for both higher quality foods and greater variety of consumer choice in household diets.