A tale of two economie: Farmers struggle despite strong US economy

At a time when the overall U.S. economy continues to boom, the U.S. agricultural sector has continued to struggle amid falling farm income and deteriorating agricultural credit conditions. Over the past five years, U.S. economic growth has continued to strengthen. The growth in U.S. real gross domestic product (GDP) has averaged 2.4 percent per quarter since 2013. Down on the farm, though, conditions have been far from robust. From 2013 to 2017, net farm income—considered to be a broad measure of farm profitability—fell 39 percent, from $123.8 billion to $75.5 billion. The farm economy does not always run counter to the rest of the overall economy, but unique conditions this past year— amplified in the Midwest—continue to curb agricultural growth. In 2012, commodity prices began to soar as a severe drought that summer lingered in the main growing areas of the Midwest, leading to a jump in land values and farm income. Strong domestic and export demand also fueled gains. Following this 2013 peak, though, crop prices dropped amid increased plantings, good growing conditions and higher crop yields.