U.S. farm profits are expected to increase in 2017 following three years of decline, according to the U.S. Department of Agriculture. If projections hold true, Virginia farmers stand to benefit.
Net cash farm income for 2017 is forecast at $100 billion, up 12.6 percent from 2016. Net farm income is forecast at $63 billion, a 3 percent increase from last year, according to USDA numbers released Aug. 30.
Rising production and higher livestock prices are driving the expected increases. Forecasts for both livestock and crop cash receipts are favorable.
“This is encouraging news for most Virginia farmers,” said Tony Banks, a Virginia Farm Bureau Federation commodity marketing specialist. “First, Virginia’s leading commodities are poultry and livestock, so if this projection holds true, these producers will benefit. Secondly, market improvements for poultry and livestock will support feed demand and, in turn, grain and soy prices, benefitting our farmers who raise these crops. Regardless, demand for agricultural products is expected to remain strong, which will continue to support prices despite large supplies.”
Cash receipts for 2017 are expected to rise $14 billion, or 4 percent this year, thanks to the gains in the livestock and dairy sectors. Cash receipts for broilers, hogs and cattle are expected to see strong growth in 2017 after posting significant declines in 2016.
Overall, cash receipts for crops are expected to remain mostly unchanged from 2016 as anticipated increases for some crops are offset by declines in others. Soybean, cotton, vegetable and melon cash receipts are forecast to rise, while fruit and nut cash receipts are forecast to decrease.
Banks said it is too early to know how Hurricane Harvey in Texas and Louisiana and Hurricane Irma in Florida, Georgia and Alabama will affect farm incomes.
“Obviously, farms in the paths of the two hurricanes are suffering. Early damage estimates suggest losses in cotton, cattle and fruits and vegetables that could raise farm prices at least temporarily, but it’s too early to say how overall farm income will be affected,” he explained.
Read the full forecast at ers.usda.gov/topics/farm-economy/farm-sector-income-finances/farm-sector-income-forecast.