The U.S. Department of Agriculture’s (USDA) long-term agricultural baseline projections give farmers, agribusinesses, and policymakers a 10-year look into the future of farming and global trade. Researchers at The Ohio State University College of Food, Agricultural, and Environmental Sciences (CFAES) recently looked at the informativeness and accuracy of these projections, which many rely on when making business and government policy decisions.
Are the United States Department of Agriculture's forecasts rational? This is the question that AEDE’s Siddhartha Bora and Ani Katchova, together with Todd Kuethe, have answered in their recently published article in the American Journal of Agricultural Economics (AJAE). Ani Katchova is the Farm Income Enhancement Chair and Siddhartha Bora is a Ph.D. student working with the Farm Income Enhancement team.
Even during a growing season when 1.5 million fewer acres of soybeans and corn were planted in Ohio, average farm incomes in the state are likely to increase compared to last year, according to an agricultural economist with The Ohio State University.
That’s primarily because of higher government payments made to farmers nationwide in 2019, said Ani Katchova, an associate professor and chair of the farm income enhancement program at the College of Food, Agricultural, and Environmental Sciences (CFAES).
The Current Agricultural Use Valuation (CAUV) program allows farmland devoted exclusively to commercial agriculture to be taxed based on their value in agriculture, rather than the full market value, resulting in a substantially lower tax bill for the farmer.
Financial stress, expressed as the ability of farmers to repay loans, is important to follow during times of low farm income. A new report “Ohio Agricultural Lending Outlook: Fall 2019,” published by Kevin Kim, Robert Dinterman, and Ani Katchova with the OSU AEDE’s Farm Income Enhancement Program, points to good news for Ohio farmers. The report provides information on agricultural loan volumes and delinquencies for Ohio farmers.
The United State Department of Agriculture (USDA), on March 6th, forecasted U.S. net farm income for 2019 to increase 10% from last year, from $63.1 billion in 2018 to $69.4 billion in 2019. This forecast is a positive sign to producers after a drop in farm income in 2018.
Farming in America is a complex undertaking. There exists great diversity in the size, structure and organization of farms. All farming operations are integral to the U.S. economy and the supply of reliable food sources. To understand the agricultural sector better and maintain good agricultural policies, data collection methods and measurement tools need to keep up with the current realities of farming.
The United State Department of Agriculture (USDA), on August 30, forecasted U.S. net farm income for 2018 to decline 13% from last year, from $75.5 billion in 2017 to $65.7 billion in 2018 (USDA 2018). If realized, U.S. net farm income would decrease to levels witnessed in 2016 (Figure 1). This decline is even larger when we consider inflation-adjusted values, showing a 14.8% decrease in real U.S. net farm income. The USDA also made a similar downward forecast for U.S. net cash income. Net cash income is projected to drop 12% in 2018, from $104 billion in 2017 to $91.5 billion in 2018. These declines in farm income reverse the small rebound in income in 2017 to what would be the second lowest values in inflation-adjusted terms since 2002.