The Outlook for U.S. Agriculture From USDA’s Chief Economist

Dr. Johansson noted that, “Farm income has fallen dramatically since 2013, falling almost 30 percent in real terms. That is the largest 4-year drop in farm income in 40 years, when real farm income fell more than 45 percent between 1973 and 1977.  We have seen record production in major commodities over the past few years, and as a result prices are down significantly.  Baseline projections show flat farm income throughout the 10-year forecast period.” With respect to farmland values, Dr. Johansson explained that, “While the farm income forecast is down by almost 50 percent in nominal terms since the peak in 2013, farmland values remain relatively strong. While they have come down off their highs from two years ago, those values continue to underlie a relatively strong debt- to-asset ratio, which is now expected to be 13.9 percent in 2017, up from the low point in 2012 of 11.3 percent, but well below the peak of more than 22.2 percent in 1985.