The farm income outlook for 2009 has deteriorated significantly because of lower commodity prices and cash receipts, reports John Kruse, an economist at IHS Global Insight. Total cash receipts for 2009 are now expected to drop 9% from last year's level, with the reduction split fairly evenly between the crop and livestock sectors. "The 2008 total was by far a record high, however, so historically speaking this year's cash receipts will still be relatively high.”
Kruse points out that although cash receipts in 2008 topped the previous year's by almost $40 billion, net farm income rose a more modest $2.5 billion, due to higher production expenses. Net farm income still set a record at $89.3 billion. That will drop to $70.1 billion this year.
"Longer term, income is not expected to return to 2008's record level,” he says, "although it is expected to rebound somewhat in 2010-12, to close to $80 billion.”
IHS Global Insight pegs the 2009 average cash corn price at $3.85/bu., soybeans at $8.62 and cotton at 42.5¢/lb.