Due to government payments dip, USDA says

Although the value of crops produced is expected to rise this year, U.S. farmers will see a $4.1 billion drop in net farm income compared to 2000, due chiefly to an expected decline in government payments.

That's the forecast of USDA Economic Research Service economists at the annual Agricultural Outlook Conference in Washington.

Net farm income this year is projected at $41.3 billion in 2001, compared to $45.4 billion last year (and 1990-2000 average of $45.3 billion. Government payments to farmers are expected to total $14.1 billion, about $8 billion less than in 2000.

$101 billion total value

In the report by Mitchell Morehart, James Ryan, and Robert Green, total value of crop production this year is forecast at $101 billion, a gain of $4.7 billion over last year (and following a $3.2 billion gain in 2000).

The increase is “noteworthy,” they say, since by 1999 the value of U.S. crop production had fallen an astounding $22.4 billion from its record $116 billion in 1996, primarily the result of falling marking prices for most commodities.

Grains, cotton, oil crops, and tobacco crop receipts are expected to increase by about $3.3 billion this year, they say, while livestock receipts are forecast to rise only slightly over 2000's record $99.5 billion. Poor forage conditions, due in large part to drought over the past three years, held down beef cattle inventories despite improving prices.

Receipts for cattle and calves are expected to decline slightly this year on the heels of a $3.7 billion increase from 1999-2000. Gains for cattle and calves in 2000 helped to increase the value of livestock production by $4.1 billion, even though the value of dairy production dropped by $2.5 billion.

After an almost 7 percent production growth in 1999, broiler production slowed by about half in 2000, dropping well below the 20-year average growth rate of 5 percent. Broiler production this year is expected to be only slightly ahead of 2000.

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