It's hard to imagine with corn and wheat prices so robust, but the government says net farm income is down for 2006. That's because the government itself is, shall we say, less pro-active with the checkbook this year. It's the way the farm program's counter-cyclical payment plan is arranged ... prices go up and government payments go down. In its latest report this week, USDA supplied the details.
On the economic front, there is good news ... and bad news for farmers this week. First the good news. Cash receipts for crops were up – due in large part to higher prices paid for corn "fueled" by the boom in ethanol production.
For all crops and livestock, cash receipts are expected to total $242 (B) billion dollars this year – up by more than 3 billion dollars from 2005.
Now for the bad news. Farmers may be getting more for their grains, but USDA Chief Economist Keith Collins says they will continue to get less from the federal government. He said the government is expected to make $16.5 billion dollars worth of direct payments to farmers – significantly lower than the $24 billion paid out in 2005.
In yet another measure of the farm economy, net farm income for the year – including all of the government subsidies – is expected to total $58.9 (B) billion dollars, a drop of $14.9 (B) billion from last year.
The first official USDA forecast for 2007, is expected in February.