Roger Bernard, Farm Journal Policy & Washington Editor

USDA now puts 2009 net cash farm income at $69.8 billion, down $27.7 billion (28.4%) from 2008. In August, USDA forecast net cash farm income at $68.2 billion.That's according to figures from the Economic Research Service (ERS).

Net farm income is forecast for 2009 at $57 billion, down $30 billion (34.5%) from 2008. The 2009 forecast is $6.5 billion below the average of $63.6 billion in net farm income earned in the previous 10 years. Still, the $57 billion forecast for 2009 remains the eighth largest net farm income figure.

NOTE: Net cash income is projected to decline less than net farm income in part because net cash income reflects the sale of $1.0 billion in carryover stocks from 2008. Net farm income reflects only the earnings from production that occurred in the current year.

Net value added, at $108.4 billion, is expected to fall from a record $135.7 billion in 2008, but remain above its 10-year average. Some of the decline in value of production is offset by the drop in expenditures for purchased inputs.

ERS noted that 2008 results were "driven by a large increase in the value of crop production that was only partially offset by rising costs of production for the farm sector. The value of crop production exceeded its previous record (set in 2007) by $31.6 billion, a 21% increase."

In 2009, ERS said that crop prices have continued to decline and prices for livestock animals and products have experienced sharp declines. "With economic conditions deteriorating worldwide, demand for exports has tailed off, with few options available to expand marketing elsewhere," ERS said. "Sharply declining demand in 2009 has forced farmers to accept prices that are lower than were expected earlier in the year when production plans were made."

Here's a link to read more.