In its recent report on farm income, USDA expects farm profitability to dip this year by 32 percent from the last estimate.
Net farm income is now projected at about $73 billion in 2015, well below the $108 billion forecast last year.
USDA cites lower crop and livestock prices as main drivers behind lower farm income, with production expenses marginally higher and government payments expected to increase 15 percent.
In a conference call with reporters earlier this week, Iowa Senator Chuck Grassley was pessimistic about the numbers.
He says, “They didn’t look any further ahead, but as long as we keep overproducing, and there’s questions about the expansion of ethanol, and the fact that exports are down, I think you can even see it continuing beyond 2015.”
Grassley says it’s not hard to believe the numbers, given the current farming environment, though he does expect income will eventually rise.
“Prices will go back up,” Grassley says, “but now, at New Hartford and Shell Rock, where we sell our grain, you know, probably corn is 75 cents to a dollar below the cost of production, and that’s what’s typical of the 32 percent reduction in income “
Farming in Iowa, with just over seven percent of total U.S. farm receipts, is projected to be a $35.5 billion industry in the coming year.