The USDA’s annual Farm Income Forecast has been released, and it predicts that profitability will continue a weakening trend that started in 2014. Net Cash Income is projected to fall by 21% to $100.3 billion, due to lower crop and livestock receipts. Net Farm Income is projected to be down by 26%, to $58.3 billion from 2014 projection of $91.1 billion. Read the entire report at the USDA here.
Those in Agriculture are no strangers to falling markets and smaller margins, but these numbers are actually something that has been praised by U.S. Secretary of Agriculture Tom Vilsack. In a statement press release, Vilsack agreed that weakened profitability is less than desirable, but he offers some good points as to why these numbers give us reason to cheer. His first point: profitability is falling due to extremely high levels of profitability in past years; for instance, Net Farm Income in 2013 was $123.7 billion or 53% higher than 2015’s projection. Basically, it’s hard to compare apples and oranges when the apples cost so dang much to begin with.
Vilsack also pointed out that the Ag Industry has faced some pretty serious issues recently. The first is the drought that is ravaging the West; it’s the center of a lot of Agriculture-based activity, and it’s suffering from the lack of water. Another issue is what Vilsack labels as “the worst animal disease outbreak in our nation’s history,” referring, no doubt, to the Avian Influenza that has decimated poultry populations. Vilsack’s point was that despite industry-crippling issues such as these—and these are not the only issues affected Agriculture—the industry is still going strong.
Lastly, Vilsack also points to all the record-setting sales and profits—2013’s numbers referenced above were record-setting—the Ag industry is seeing, especially in locally-grown food; biobased Ag is another area that is still growing and expanding with leaps and bounds, not to mention holding promise for jobs, the economy and the environment. In short, despite a weakened forecast, the Agriculture industry will remain as strong as ever.