By Hope Kirwan
As the U.S. Department of Agriculture forecasts a slight decline in farm income this year, Wisconsin agriculture experts continue to worry about the financial resilience of the state’s farms.
The USDA’s annual Farm Income Forecast expects net farm income to increase by 1.4 percent from 2019 in inflation-adjusted terms. But net cash income, a measure of farm-related income minus cash expenses during the year, is forecast to decline by 10.7 percent this year.
A big part of that decline comes from large sales of commodities in inventory or storage. In 2019, inventory sales reached $14.7 billion. But the USDA expects this year's inventory sales to be only $500 million.
"That's a big difference. And so it'll be interesting to watch as time goes on whether that changes," said Kevin Bernhardt, agribusiness professor at the University of Wisconsin-Platteville.
The way that USDA counts inventory sales also impacts how they show up in the data. When calculating net cash income, sales of inventory are counted during the year they happen. But when calculating net farm income, the sales are counted during the year the commodity was produced.
The annual forecast also expects government payments to farmers will decline significantly this year, falling 36.7 percent from 2019.
The change is due in large part to declining payments from the Market Facilitation Program, which was meant to make up for the impact of retaliatory tariffs on U.S. agricultural goods.
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