Farmer Income Drops Most Since 2016 as Trade War Losses Mount

Personal income for farmers fell by the most in three years in the first quarter, as losses to U.S. agriculture mount from President Donald Trump’s trade wars.

Tariffs are impacting farm income.
Tariffs are impacting farm income.
(MGN)

(Bloomberg) -- Personal income for farmers fell by the most in three years in the first quarter, as losses to U.S. agriculture mount from President Donald Trump’s trade wars.

The Commerce Department on Monday cited the steep decline in farm proprietors’ income as a key factor weighing on the nation’s overall personal income growth in March, even though agricultural producers represent only about 2 percent of total employed Americans.

The report provided fresh evidence of the growing financial strain on U.S. farmers hit by the trade war, low commodity prices and a series of natural disasters including spring floods in the Midwest. With rural voters a key part of Trump’s electoral coalition, it also underscores the political pressure to conclude the China trade war as U.S. negotiators begin another round of talks in Beijing this week.

One-time subsidy payments from the Trump administration to compensate producers for some of their trade-war losses helped prop up farm income in the previous quarter, but earnings plunged by an annualized $11.8 billion in the January to March period, according to seasonally adjusted data. On Monday, Larry Kudlow, President Trump’s top economic adviser, said the White House is prepared to do more to help agriculture.

Trump’s budget cuts would lower federal subsidies for crop insurance and small growers. The spending plan for 2020 he submitted for Congress would reduce subsidies for crop insurance premiums to 48 percent from 62 percent and limit current subsidies for growers who make less than $500,000 annually.

©2019 Bloomberg L.P.

AgWeb-Logo crop
Related Stories
How to spot — and stop — toxic behaviors poisoning your business.
Some of the easier entry points for corn and soybean farmers looking to capture higher returns can deliver $200 or more per acre.
The Canadian headquartered farm group owns more than 274,000 acres in Alberta, Saskatchewan, Manitoba, British Columbia, Montana, Colorado, and Arizona.
Read Next
The change implements provisions in the One Big Beautiful Bill Act and updates long-standing Farm Service Agency rules that had capped many entity-based operations at a single payment limit.
Get News Daily
Get Market Alerts
Get News & Markets App