OMAHA (DTN) -- It may not offer much solace to producers facing Texas floods or drought in the Northern Plains, but USDA on Wednesday projected a small upturn in net farm income for 2017.
In its August update forecasting farm income, USDA bumped up net farm income for 2017 to $63.4 billion nationally, a $1.9 billion increase, or 3.1% higher than 2016's net farm income.
The stronger forecast comes mainly from $9.7 billion more in cash receipts from farmers selling crop inventories, USDA stated.
Despite the small bump, that $63.4 billion in net farm income is still lower than every year from 2010 to 2015, a reflection of just how low farm income dipped last year. Net farm income peaked in 2013 at $131.3 billion and then declined the next three years.
The median farm household income is forecast to remain level at $76,831 for 2017, which is $4,800 lower than the median farm income peak in 2014.
While household income remains steady, farm operations are largely expected to show negative income in 2017. As USDA notes, more than half of farm households have lost money on their farming operations in recent years. Those households largely make up the losses with off-farm jobs.
While overall cash receipts are up, total production costs, forecast at $4.6 billion, are also up 1.3% from 2016. Farmers paid more in interest costs, hired labor and fuels. Some of those costs were offset by lower feed and fertilizer expenses.
Farm asset values are projected to increase 4% as well in 2017, but farm debt is projected to go up by 4.4%. The rise in farm debt is driven mainly by higher real-estate debt, up 7.5%. Overall farm-sector equity, a measure of assets and debt, is pegged at $101.8 billion, up 3.9% from a year ago, USDA stated.
Cash receipts are projected to increase $14.1 billion, or 4%, in 2017, driven mainly by a $13.6 billion bump in receipts related to livestock products. Dairy, poultry, egg and hog revenues are up, reflecting increases in both volume and price. Farm business average net cash income is expected to go up 42% for dairy, 38% for hogs and 31% for cotton (again reflecting the report did not consider crop losses from Hurricane Harvey).
Despite selling down their inventories, cash receipts for crop farmers are expected to remain relatively flat in 2017 as increases in some crops are offset by price declines in others.
Direct government payments are projected at just under $13 billion in 2017.