The Department of Agriculture last week released its 2014 Farm Income Forecast, which predicts U.S. net farm income will fall to $95.8 billion this year, a decline of 26.6 percent.
The report vividly demonstrates the volatile nature of the business of farming and ranching.
The 2014 Farm Income Forecast notes that although the net income forecast is the lowest since 2010, it remains $8 billion higher than the previous 10-year average.
Much of the decline is attributed to changes in corn and soybean prices.
The USDA also estimates that the elimination of direct payments in the 2014 Farm Bill and other changes in government programs will reduce government payments by 45 percent.
The report offers a mixed bag for farmers and ranchers in the Northwest.
• The annual wheat price is expected to decline “significantly” because of large crops worldwide and large declines in the price of competing grains such as corn and soybeans.
• Dairy receipts are expected to increase, propelled by strong export markets. Dairymen are expected to also benefit from lower feed grain prices.
• Production expenses are expected to decline slightly.
• Livestock producers are expected to see a 9 percent decline in net cash income.
• Fruit, vegetable, nursery and other specialty crop producers are expected to see a 24 percent decline in average cash farm income in 2014.
Everyone involved in agribusiness knows that some years are good; some years are bad; and some are not necessarily good or bad, just better or not as good as the one before.
As drought continues to loom over this growing season, it remains to be seen where 2014 will fall. As always, the farmers and ranchers who succeed in bad times are those who practice good stewardship of all of their resources at all times.