The chief economist for the American Farm Bureau Federation says the worst threat to farmers currently is a general economic recession. It’s because so many farmers have now become dependent on off-farm income to make ends meet and stay in operation. Farm Bureau’s Chief Economist, John Newton, spoke during a panel of ag economists’ discussion at the Crop Insurance Industry Convention.
“Farm lenders say the reason why we can continue to do what we are doing is off-farm income,” Newton says. “It’s off-farm income that allows folks to continue to farm. Lenders are really concerned about a slowdown in the U.S. economy.”
The Hagstrom Report says Newton presented statistics on the decline of farm income since 2013. Newton told the people in attendance that the overall U.S. economy is still performing well. The concern comes in because the consumer confidence index, as well as the CEO Confidence Index, are both down. Newton says USDA statistics show a drop of $57 billion in farm income since 2013, a 47 percent drop. Gross farm income in 2018 came in at $435 billion, while production expenses were $369 billion. The net farm income total was $66.3 billion, a steep drop since 2013. Net farm income last year was the third-lowest in the last two decades in inflation-adjusted terms. Without the government payments figured in, 2018 would have seen the lowest net farm income of all time, Newton adds.