Net farm income has dropped by about 50 percent over the last five years—but the decline came after sector income reached record highs around 2013, so even after the steep drop, it’s close to the average since 1970.

Farm debt, meanwhile, has reached the highest levels since the 1980s farm crisis. But the value of agricultural assets—namely farmland—has appreciated even more rapidly, so the industry’s “debt-to-asset ratio”—a key indicator of financial stability—remains low compared to the long-run average.

The findings, which account for data through 2017 and some estimates for 2018, back up a common assessment from many ag economists: Current farm conditions are difficult, and worsening, but still not as bad as the crisis of the 1980s. Still, ERS notes that agriculture is “in a less prosperous and potentially vulnerable period,” and “extreme financial stress” is already more prevalent for specific operations like poultry, dairy and hog farms.

Source: Politico

The overall index rose to 51.4 from 50.1 in September. This is the highest reading since June. It also marks the third time in the past four months that the overall index has risen above growth neutral.

“Federal agriculture crop support payments and somewhat higher grain prices have boosted the Rural Mainstreet Index slightly above growth neutral for the month. Even so, almost three of four bank CEOs, or 73 percent, reported continuing negative impacts from the trade war,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The October farm equipment-sales index improved to 39.7 from September’s 35.9. This reading is also the highest it has been since June, although at the below-50 mark, it does not yet represent growth in the market.

Borrowing by farmers for October remained strong. The borrowing index declined to a strong 68.9 from September’s 72.2. The checking-deposit index advanced to 60.8 from September’s 54.2, while the index for certificates of deposit and other savings instruments dipped to 50 from 51.4 in September.
The confidence index, which reflects bank CEO expectations for the economy six months out, fell to 36.5 from September’s 42.9, which is the lowest it has been in two years.

Each month, community bank presidents and CEOs in agriculturally and energy dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming participate.

The layoffs include roughly 50 workers at the Harvester Works facility in East Moline, Ill., and more than 100 workers at the Davenport Works facility in Davenport, Iowa. Deere also lowered its income forecast to $3.2 billion in August, from the previous forecast in February set at $3.6 billion.

Source: Nebraska Rural Radio Association

Cal-Maine Foods Inc., the nation’s top egg producer, said recently that prices for its eggs fell 30 percent to about 92 cents a dozen in its quarter that ended Aug. 31.

The U.S. flock of laying hens rose to 331.4 million in early September, according to the USDA, up 800,000 birds from a year ago. Chickens in the U.S. produced more than 65 billion table eggs through August this year, up 3 percent from last year. Iowa, Indiana and Pennsylvania are among the states that produce the most of those types of eggs.

Retailers have been quick to pass the drop in egg prices on to consumers. Eggs have been advertised for sale in some parts of the country for as little as 48 cents a dozen, the USDA said.

Analysts expect producers will have to cut back production in part by sending birds to slaughter to bolster prices.

Source: Wall Street Journal