Farm sector weakness forecast to continue to year's end

Net cash farm income is forecast at $90.1 billion and net farm income at $66.9 billion for 2016, according the U.S. Department of Agriculture’s Economic Research Service.Both measures are forecast to decline for the third consecutive year after reaching record highs in 2013 for net farm income and 2012 for net cash income. Net cash farm income is expected to fall by 14.6 percent in 2016, while net farm income is forecast to decline by 17.2 percent. These declines follow the 19.8- and 12.7-percent reductions in net cash income and net farm income, respectively, that occurred in 2015.  Overall, cash receipts are forecast to fall $23.4 billion (6.2 percent) in 2016 due to a $23.4-billion (12.3 percent) drop in animal/animal product receipts; crop receipts are forecast essentially unchanged from 2015. Nearly all major animal specialties—including dairy, meat animals and poultry/eggs—are forecast to have lower receipts, including a 14.8-percent drop ($11.6 billion) in cattle and calf receipts.The slight gain in crop cash receipts is driven largely by a $5.3-billion increase in oil crop receipts, namely soybeans, while feed crops and vegetables/melons are down $2.2 billion (3.8 percent) and $1.4 billion (6.9 percent), respectively.While overall cash receipts are expected to decline, receipts for several commodities—including turkeys, rye, cotton (cotton lint), miscellaneous oil crops and tobacco—are forecast to rise by 10 percent or more.