NEVADA, Iowa – Net farm income is an indicator of the U.S. farm sector?s well-being, and in 2015, USDA projects it will tumble 33 percent from last year; $73.6 billion, as compared to $108 billion in 2014. Lower crop prices are the main culprit, and if realized, this year?s farm income will be the lowest since 2009.
For farmers, that means belts will be a little tighter in 2015. Input costs like feed, fertilizer, and fuel are actually expected to decrease, but that?s also where farmers will see many of the expenses on their balance sheets.
Fifth-generation Story County farmer Mark Kenney expects producers to be a little more frugal with inputs this year.
“Farmers [will be] looking, really shopping around, maybe more so than they have in the past for inputs,” Kenney explains. “Maybe looking at different feed options, and different fertilizer options, and really paying closer attention to every nickel, whereas in the past that may not have been the case. And certainly, I think the bigger impact is going to be felt in new- and late-model farm equipment. I get the sense that there just isn’t room in the budget for a lot of equipment upgrades at this time.”
Because crop prices are lower, USDA has also projected cropland acres planted to wheat, corn and soybeans lower as well, with most of the reduction coming from corn acres. However Kenney doubts Iowa farmers will reduce planted acres much, if at all.
“In Iowa, I don’t foresee that being a real big change,” he says. “You might see a different mix of crop, less corn more soybeans. Just because the cost of, the initial, up front cost of growing corn is much higher than soybeans but as an overall number of acres farmed, I would guess if there’s any reduction it would be so insignificant that it would be hard to measure.”
The farm safety net is also expected to do its job in 2015, triggering about twelve and a half billion dollars in government payments. That amount would offset roughly half of the decline in crop and livestock receipts projected in the upcoming year.
USDA will have more information on farmers’ intentions for 2015 acreage in the annual Prospective Plantings report, out at the end of March.
To hear more from Story County farmer Mark Kenney about the toll lower crop prices will take from Iowa growers this year, click the audio player above this story.
