Farm Income Could See Slight Increase in 2017

Podcast / Newsline May 2nd, 2017

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Commodity prices may have hit bottom during 2016, but an economist with the American Farm Bureau Federation says that doesn’t mean major price moves this year. Micheal Clements has more.

Clements: Farm income could see a slight increase this year, compared to 2016. American Farm Bureau Federation chief economist Bob Young says it’s possible the farm economy hit bottom last year.

Young: I think we can get a little bit of a revenue increase and a little bit of a cost decrease when we look across the sector as a whole. I think we may see--I’m only talking about 2017--income up maybe a couple billion dollars or so, from 2016 out of 65, 70 or so, so, nothing great, but I think it’s possible that we actually hit bottom in ‘16.

Clements: He says there are many factors to watch during 2017 that could sway the market, but cautions that there won’t likely be much price movement for row crops.

Young: If I’m a row crop guy, I’d kind of watch these wet, cool conditions that we’ve got now. It won’t surprise me that if these stay around for another couple weeks or so in the Midwest that we’ll begin to get some concerns on corn plantings, for example. I’m not so convinced that unless we end up with a real crop situation, that we talk about a major price move this year. I just am very hard-pressed to see much of a price move on the wheat front. Cotton prices have had some movement there and if we do end up with this big crop that we say we are going to get, I think cotton prices are sideways, maybe down a little bit.

Clements: He says the current price situation will be addressed during negotiations of the next farm bill.

Young: We’re talking about a budget situation for agriculture that’s very tough, very tight, very small amounts of money in the Congressional Budget Office’s projections on what we’ll spend on the cotton program, on the dairy program for example, just going to make writing policy for those commodities very tough as we roll forward, could become even more intense than we’ve had in times past just because of that lack of a budget pot to go to.

Clements: Micheal Clements, Washington.

Shiloh Perry
Communications Assistant, AFBF

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