Farm income expected to rise


By Alayna DeMartini - OSU Extension



Farm incomes are expected to rise this year. It stems from national gains in sales of cattle, hogs, poultry, eggs, and dairy, and the sale of stored crops harvested in a prior year.

Farm incomes are expected to rise this year. It stems from national gains in sales of cattle, hogs, poultry, eggs, and dairy, and the sale of stored crops harvested in a prior year.


Contributed photo

COLUMBUS — Even amid lagging profits from corn and soybeans, Ohio farmers have a reason to be optimistic, according to an agricultural economist from the College of Food, Agricultural, and Environmental Sciences (CFAES).

“Farm incomes are forecasted to increase this year nationally for the first time in four years,” said Ani Katchova, an associate professor and Farm Income Enhancement chair in the Department of Agricultural, Environmental, and Development Economics at The Ohio State University.

Prices for corn, soybeans wheat and other agricultural commodities started to decline after their peak in 2012, triggering an agricultural economic downturn beginning in 2014.

“Part of the expected increase in farm income this year stems from national gains in sales of cattle, hogs, poultry, eggs, and dairy, and the sale of stored crops harvested in a prior year,” Katchova said.

“Farm assets and equity are also forecasted to rise.

“Financial conditions seem to be improving, albeit slowly. When I say improving, we’re coming from a low point in farm income. Hopefully, the worst is over.”

Katchova spoke at the Agricultural Policy and Outlook Conference on Thursday, Nov. 9, an annual event organized by Ohio State’s Department of Agricultural, Environmental, and Development Economics. The event at the university’s main Columbus campus kicked off a series of meetings that will be held statewide from Jan. 22 to March 23 to provide the 2018 financial outlook for farmers and agribusinesses.

While the income for farmers may be on the upsweep, challenges remain.

“Expenses for farmers are expected to continue to increase due to higher costs for hired labor, interest and fuel, with some declines in expenses for feed and fertilizer,” Katchova said.

Also, cash rent Ohio farmers pay on farmland keeps rising and is higher than the national average, Katchova pointed out. Cash rent is a fixed amount a farmer pays to a landlord per acre of land rented.

“In Ohio, cash rent did not come down during the agricultural economic downturn as much as it did nationally,” Katchova said.

However, farmland values in Ohio have remained high, which is a boon for the state’s landowners who are farmers.

“I have a hard time saying we’re in a farm financial crisis with land values where they are, but I would be naive to say there aren’t farmers hurting,” said Ben Brown, who manages CFAES’ farm management program, which provides farm policy and market information to Ohio farmers and others.

“In the last couple of years, Ohio’s agricultural land prices have been stable while land prices in some neighboring states have fluctuated more significantly,” Brown said.

“Nationally, the downturn in farm income in recent years was not as severe as the dip experienced in the 1980s when grain prices dropped, farm debt soared and numerous farms went bankrupt,” Katchova said. “The 1980s was when the last agricultural economic slump occurred nationwide.

“We are in a very different situation than we were in the 1980s.”

Farm mortgage interest rates now are only 4 to 5 percent compared to the 17 percent interest rates in the 1980s. Also, the rate of farm bankruptcies during the last quarter was two out of 10,000 farms while during the farm crisis in the 1980s, the bankruptcy rate was tenfold, at 20 farms going bankrupt out of every 10,000 farms.

“The recent agricultural downturn and increased financial stress have led to only small upticks in agricultural loan delinquency rates and farm bankruptcies, which are still at historic low levels,” Katchova said.

“Compared to farmers in other states, Ohio farmers have been better able to fend off bankruptcy. For a little over a decade, farm bankruptcy rates in Ohio have been less than one bankruptcy per 10,000 farms, about half of the national bankruptcy rate. The delinquency rates on agricultural loans have been at 1.3 percent since last year, which are also very low.”

The low bankruptcy and loan delinquency rates are despite the fact that farmers in Ohio and nationally continue to see their available cash eroding to only a third to half of their high levels in 2010.

“Despite farmers having lower profit margins, they’re still in strong equity positions,” she said. “They’re still able to pay their debts.”

The upcoming statewide series of meetings will update Ohio communities on policy changes, key issues, and market behavior relating to farm, food, energy resources and the environment. Each meeting is hosted by an Ohio State University Extension office or a local business. OSU Extension is the outreach arm of CFAES.

The meeting schedule is as follows:

Pickaway County

Monday, Jan. 22, 7:30-10:30 a.m., Emmett Chapel, 318 Tarlton Road, Circleville.

Speakers will be Barry Ward, Matt Roberts and Ian Sheldon.

The cost is $10. RSVP to OSU Extension Pickaway County at 740-474-7534. Registration deadline is Monday, Jan. 15.

Crawford County

Monday, Jan. 22, 5:30-8:30 p.m., The Loft at Pickwick Place, 1875 N. Sandusky Ave., Bucyrus.

Speakers will be Barry Ward, Matt Roberts and Ian Sheldon.

The cost will be $15. RSVP to OSU Extension, Crawford County at 419-562-8731 or email hartschuh.11@osu.edu.

Registration deadline is Monday, Jan. 15.

Union County

Friday, Jan. 26, 7:30-10:30 a.m., Der Dutchman, 445 S Jefferson Ave, Plain City.

Speakers will be Barry Ward, Matt Roberts and Ian Sheldon.

The cost will be $15. RSVP to OSU Extension, Union County at 937-644-8117.

Registration deadline is Monday, Jan. 22.

Defiance County

Monday, Jan. 29, 6-9 p.m., Jewell Community Center, 7900 Independence Road, (one third of a mile south of U.S. 24 in Jewell).

Speakers will be Barry Ward, Matt Roberts and Ian Sheldon.

The cost will be $10. After deadline it will be $20. RSVP to OSU Extension, Defiance County or online at http://defiance.osu.edu.

Registration deadline is Monday, Jan. 22.

Wayne County

Wednesday, Jan. 31, 9:30 a.m. to 3:30 p.m., Fisher Auditorium, 1680 Madison Ave., Wooster.

The speakers will be Ian Sheldon, Matt Roberts, Ben Brown, Barry Ward, Dianne Shoemaker and David Marrison.

The cost will be $15. RSVP to OSU Extension, Wayne County at 330-264-8722.

Registration deadline is Wednesday, Jan. 24.

Darke County

Friday, March 23, 11 a.m. to 4 p.m., Romer’s Catering, 118 E. Main St., Greenville.

The speakers will be Barry Ward, Matt Roberts, Chris Hurt and Chris Bruynis.

The cost will be $20. RSVP to Darke County Extension office at 937-548-5215.

Registration deadline is Friday, March 16.

Farm incomes are expected to rise this year. It stems from national gains in sales of cattle, hogs, poultry, eggs, and dairy, and the sale of stored crops harvested in a prior year.
https://www.madison-press.com/wp-content/uploads/sites/37/2017/11/web1_Farmincomepiccol.jpgFarm incomes are expected to rise this year. It stems from national gains in sales of cattle, hogs, poultry, eggs, and dairy, and the sale of stored crops harvested in a prior year. Contributed photo

By Alayna DeMartini

OSU Extension

Alayna DeMartini can be reached by email at demartini.3@osu.edu or call 614-292-9833.

Alayna DeMartini can be reached by email at demartini.3@osu.edu or call 614-292-9833.

RECOMMENDED FOR YOU