Recent USDA Updates Provide Snapshot of Farm Economy Variables

Last week, USDA’s National Agricultural Statistics Service (NASS) released three important updates that provide current insight into the state of the U.S. agricultural economy.  The releases focused on land values, cash rents, and production expenditures. Meanwhile, USDA’s Economic Research Service (ERS) recently updated its monthly agricultural trade data, and on Monday, included an article related to farm household income in its Amber Waves magazine publication. As lawmakers and the executive branch continue to gather perspective in preparation for the next Farm Bill, today’s post looks briefly at some of the key findings from these recent USDA updates on the farm economy.  NASS indicated that, “The United States cropland value remained unchanged at $4,090 per acre from the previous year. In the Southern Plains region, the average cropland value increased 6.0 percent from the previous year. However, in the Northern Plains region, cropland values decreased by 4.4 percent.” Cropland cash rent paid to Iowa landlords in 2017 averaged $231.00 per acre. This represented a decline from $260 in 2014, $250 in 2015, and $235 from last year. Farm Production Expenditures in the United States are estimated at $346.9 billion for 2016, down from $362.8 billion in 2015. ERS indicated that, “After adjusting for inflation, the decline in net cash income from 2013 to the ERS forecast for 2016 would be the largest decline since the 1980s in both absolute ($44 billion) and percentage (35 percent) terms. Prices received by farmers for all major commodities are lower, with many (such as corn, wheat, and milk) down 30 percent or more from highs recorded just a few years earlier. The recent declines in net cash income for the farm sector are large in percentage terms. But, when viewed over a longer time horizon and after adjusting for inflation, net cash income is forecast to return to the levels observed before this record growth. In 2016, net cash income is forecast nearly $4 billion (or about 5 percent) higher than the average net cash income from 2000 to 2009.”