Net farm income will drop to $97 billion this year, down nearly 22% from last year’s estimate of $122.8 billion, according the U.S. Department of Agriculture’s latest forecast. The 2014 forecast would be the lowest since 2010, but would still be $16 billion above the previous 10-year average.
The reasons for the drop include an increase in production expenses and a decline in crop receipts. Total production expenses are projected to increase 5.7%. Corn receipts are projected to decline by $10.5 billion and soybean receipts by $7.9 billion compared to a year ago. Livestock receipts are estimated to increase by more than 14% in 2014 to $25.7 billion with a 19% increase in cattle and an 8% increase in hog receipts.