By Pam Smith
DTN Progressive Farmer Crops Technology Editor
DTN Ag Policy Editor
(Dow Jones) -- Income for U.S. farmers will fall 17.2% this year to a seven-year low, as falling livestock revenues add to pressure from lower grain prices across the Farm Belt.
The Agriculture Department on Wednesday said net farm income will drop to $66.9 billion, its lowest point since 2009 and the third consecutive decrease since farm profits hit record highs in 2013.
The forecast points to a continued decline in the U.S. agricultural economy, prompted by four straight years of bumper corn and soybean harvests as well as record global grain supplies.
The outlook is dimmer than the $71.5 billion in income forecast by the USDA in August. The lower projection reflects weak livestock prices, and the harvest of what was likely the largest corn crop on record this autumn.
Earlier this month, the USDA estimated domestic farmers would harvest the biggest corn and soybean crops in history: 15.226 billion bushels of corn and 4.361 billion bushels of soybeans. Huge supplies of meat this year also have sent prices plunging.
Livestock receipts are expected to fall 12.3% in 2016 thanks to declining revenues from milk, cattle, hogs, poultry and eggs. Profits are falling after farmers started raising more hogs and broiler chickens, the government said.
The USDA said annual crop receipts would remain steady this year from 2015 despite declines in prices for major U.S. crops like corn and wheat. While receipts for the two grains are expected to drop 4% and 10% respectively, soybeans receipts will increase 16% amid projected record production and higher prices for the oilseeds this year.
With the falling incomes, the USDA said, government payments to farmers would likely increase 19.1% this year to $12.9 billion, as insurance-like programs kick in.
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