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Modest increase in farm income forecast for 2017

Article-Modest increase in farm income forecast for 2017

National Pork Board Sun setting behind a hog farm
Legislative Watch: USDA estimates modest bump in farm income; U.S. and South Korea discuss KORUS; Brazil places tariff on U.S. ethanol; WOTUS public meetings planned.

USDA is estimating a modest increase in farm income for 2017. USDA’s Economic Research Service’s latest forecast on “2017 Farm Income Forecast” has net cash farm income at $100.4 billion, up $11.2 billion (12.6%) compared to 2016.

Net farm income, a broader measure of profits, is estimated at $63.4 billion, up $1.9 billion (3.1%) compared to last year. This increase is after three consecutive years of decline. Forecasts from the report include:
• Cash receipts are to increase to $14.1 billion (4.0% over 2016)
• $13.6 billion (8.4% increase) in animal/animal product receipts.
• Hog, dairy and poultry/egg receipts are up due to expected increases in both price and quantity sold.
• Cattle/calf receipts are up because of expected increases in quantity sold.
• Crop cash receipts are expected to remain flat with corn receipts declining $0.3 billion for the fifth year in a row. Soybean receipts are to rise to $2.4 billion as the result of higher prices and an increase in quantities sold.
• Direct government payments are forecast at $13.0 billion.

U.S. and South Korea meet on KORUS
The United States and South Korea recently met in Seoul, South Korea, to discuss possible changes to the U.S.-Korea Free trade Agreement. The United States emphasizes the current trade deficit with South Korea, the importance of reviewing the agreement, and the need for greater access for U.S. exports.

South Korea says that there needs to be first a determination for the cause of the trade imbalance between the United States and Korea and that a joint study should be completed on the impact of KORUS before amending the trade agreement. The United States will review South Korea’s proposal prior to the next meeting. KORUS was implemented in 2012.

South Korea is the fifth largest export market for U.S. agriculture. In 2016, the United States exported $365 million in pork and pork products.

Brazil places tariff on U.S. ethanol
Brazil has announced the implementation of a 20% tariff on U.S. ethanol imports after a 600 million liter tariff quota. The tariff is expected to be in place for the next two years.

In a joint statement, U.S. Grains Council, Renewable Fuels Association and Growth Energy say, “We are disappointed and discouraged to see the ruling out of Brazil today imposing a tariff on U.S. ethanol. Given the tremendous volume of information we provided to Brazil that demonstrated how misguided a tariff would be, it seemed politics prevailed today and Brazilian consumers lost. Imposing tariffs on U.S. ethanol imports will hurt Brazilian consumers by driving up their costs at the pump. Additionally, this action goes against Brazil’s longstanding view that ethanol tariffs are inappropriate and will effectively close off an open and bilateral trading relationship that benefits all sides. We strongly urge this recommendation to be reversed as soon as possible and will work to that end through all available pathways.”

WOTUS public meetings planned
The Environmental Protection Agency and the Army Corps of Engineers have announced a series of 10 teleconferences to hear from stakeholders on their recommendations regarding the repeal and revisions to the Waters of the U.S. rule.

Nine of the teleconferences will focus on various sectors, including agriculture, conservation, construction and transportation, small entities, environment, mining, energy, wastewater management and drinking water agencies, etc. One teleconference will be open to the general public at large. The teleconferences will begin on Sept. 19 and run through Nov. 21.

The agriculture teleconference will be held 1-3 p.m. (Eastern) on Oct. 17. Registration information can be found on the EPA website.

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