According to an analysis released yesterday by the University of Illinois, farm incomes will continue their downward trend, with farmers making less in 2017 than in 2016.
Trend yields and commodity prices of $3.80 per bushel for corn and $9.90 per bushel for soybeans are used in 2017 projections, and if these prices hold, farmers’ financial position will further weaken in 2017.
After being at higher levels from 2010 to 2012, net incomes have decreased each year from 2012 to 2015. In 2015, net incomes averaged $500 per farm, the lowest level of any year between 1995 and 2015, and well below an income level needed to result in stable financial positions on grain farms. From income, farmers must provide for debt repayments, expansion, and family living. Most farms did not cover these requirements in 2015, resulting in reductions in working capital on most farms.
Incomes are projected to be higher in 2016, though the final analysis is not completed yet. The higher income for 2016 mostly resulted in a significant ARC-CO payment, above average yields, and lower input costs.
Net incomes on grain farms likely will remain at low levels if corn prices remain below $4.00 per bushel.