For those who believe in preparing for a rainy day, it might be time to initiate those plans . . . if you already haven't done so.
USDA projects that net farm income could fall by 36 percent this year and reach its lowest level since 2006. The 2015 net farm income total has been pegged at $58.3 billion compared to $91.1 billion just a year earlier, according to USDA economists.
Now, before anyone hits the panic button . . . remember that U.S. farms collectively reaped a record $123.7 billion in net cash income in 2013, and dairy had its best year in modern history last year.
What's contributing to this year's projected downturn?
Certainly back-to-back years of near-record corn and soybeans harvests have contributed to mounting supplies and lower returns. So, too, has the downturn in dairy.
Projections indicate that the collective U.S. dairy farm milk check could total $35 billion this year (this number is revenue, not "net cash income" as discussed earlier). That cash flow total would be down 29 percent from last year's record $49.3 billion in milk check revenue.
As for next year, most economists have projected a slow start to milk prices early in the year. That's even slower than we are currently experiencing.
(c) Hoard's Dairyman Intel 2015
September 28, 2015