WASHINGTON (Reuters) - U.S. net farm income was forecast at $71.2 billion for 2009, down 20 percent from the record posted in 2008 because of lower prices, the U.S. Agriculture Department said Thursday.
Net farm income will remain 9 percent above the 10-year average, USDA said, pointing out that government payments will be at their lowest level since 1997.
“It’s not unusual that we would see some potential slippage,” after posting record income in 2008, Agriculture Secretary Tom Vilsack told reporters.
“We’re obviously concerned. There are a number of producers that are stressed, and we’re in the process of determining what assistance we can provide,” he added, noting specific hardships impacting the dairy industry.
The global economic recession will weigh on the livestock sector, the USDA said, with export demand slumping for meat and dairy products.
A steep drop in milk prices may prompt an 11 percent slump in the value of livestock commodities, the USDA said.
Vilsack said the department hoped to provide additional credit to dairy producers in the next week or so to prevent “a significant sale of dairy cows that would create some difficulties, overall, for beef producers.”
Expenses will decline by $13.5 billion in 2009 — the first decline in expenses since 2002 — but farm expenses are still 9 percent higher than they were two years ago, USDA said.
Net farm income is a USDA measurement of the value of production during the calendar year, whether it is sold or held in storage.
The current estimate for 2009 net farm income would be the fifth largest on record, the USDA said.
The USDA expects cash receipts for almost all crops to decline in 2009 because of lower prices compared with historic highs seen in 2008.
Cash receipts for food grains will drop 22 percent, feed crops 15 percent, oilseeds 7 percent and cotton 27 percent, the USDA said.
Reporting by Roberta Rampton, Jasmin Melvin and Christopher Doering; Editing by Walter Bagley