Farm Bureau notes contradictions in farm income forecasts, farm debt up
The Agriculture Departmen’s seemingly contradictory forecasts that farm income will rise while farm net income will fall in 2020 diverged due to the issue of inventory adjustments, the American Farm Bureau Federation’s Market Intel service said in an analysis released last week.
“While farm profitability is mixed, farm debt is not,” Farm Bureau Chief Economist John Newton wrote.
“At $265 billion, farm real estate debt is projected to reach a record high in 2020 and total farm debt is forecast at $425 billion,” Newton said. “A portion of the rising real estate debt may be attributable to farmers rolling short-term debt into longer-term debt, thereby increasing total real estate debt.”
“No matter which farm income forecast you follow, one thing is certain: these numbers will change,” Newton concluded. “Farm income would likely improve if additional sales materialize as a result of improved trade with Canada, Mexico, China and Japan, among others. Farm income could face more pressure, however, if those sales do not materialize as expected in the face of increased crop acreage and production.”
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