USDA: Farm Income Up, Bankruptcy Filings Down
WASHINGTON (AP) _ Agriculture Department economists say rising incomes and a decline in the attrition rate are reasons the farm situation is looking up these days.
Recent surveys show farm bankruptcy filings in 1988 were down 50 percent from 1986, the peak year for the decade, the department’s Economic Research Service said Wednesday in a preliminary report.
″Despite the 1980s farm financial crisis, farm numbers fell less than in preceding decades,″ the report said. ″Farm numbers declined by 266,600 (per year, on the average) during 1980-89, compared with 1.7 million in the 1950s, 1 million in the 1960s, and 516,000 in the 1970s.″
The brief analysis is in a summary of the October issue of Agricultural Outlook magazine to be issued later this month.
Greg Gajewski, the magazine’s economics editor, said the summary’s account do not portray fully, however, the impact of the decline in farm numbers during the 1980s.
″There were proportionately more of the large, commercial farms that went out of business in the ’80s than in the earlier decades,″ Gajewski said in a telephone interview.
But the peak of financial stress for farmers, collectively, has passed, he said. There are still exceptions, including many who are having problems repaying loans made by the department’s Farmers Home Administration.
Others with debts to commercial banks and the Farm Credit System are faring much better than they were a few years ago.
Gajewski cited a recent American Bankers Association survey of commercial agricultural banks which showed that 2.8 percent of their farm borrowers went out of business during the year that ended last June 30.
Fifty percent of those quitting business did so because of ″normal attrition″ such as retirement and death, he said.
In 1986, 6.2 percent of the farms served by the agricultural banks went out of business. And only 29 percent of those were due to normal attrition.
The USDA report said 1989 ″net cash income″ of farmers is still expected to decline 5 percent to 13 percent from last year’s record of $59.9 billion. That was unchanged from the forecast a month ago.
Higher expenses associated with larger crop plantings are major factors in the expected decline in cash income this year. Also, federal payments to farmers will be lower.
Net cash income is the amount of gross cash income generated by farmers during the calendar year minus cash operating expenses. It includes the sales of inventory stocks build up over previous years.
Last year’s drought helped push up 1988 net cash income as farmers sold accumulated inventories at higher prices.
Another measure used by the agency is ″net farm income″ accounting, which measures the value of the current year’s production plus government payments, minus total costs. Allowances also are made for the value of family dwellings and other factors.
By this method, net farm income could rise 5 percent to 16 percent this year to a range of $48 billion to $53 billion from $45.7 billion in 1988, also unchanged from the August forecast.
WASHINGTON (AP) - Farmers are idling 29.9 million acres under this year’s federal crop programs, little more than half the 54.2 million acres taken from production in 1988, according to the Agriculture Department.
The final 1989 contract figures were released Wednesday by the department’s Agricultural Stabilization and Conservation Service. The final land-idling figure was up slightly from 29.2 million acres announced in a preliminary report on May 24.
To be eligible for price supports and related benefits, farmers who produce feed grains, wheat, cotton and rice are required to take a percentage of their base acres from crop production and put the land in conservation uses that help protect the soil.
After drought reduced 1988 production, USDA relaxed some of the idling requirements in order to boost plantings for this year’s harvest.
Total land idled, or diverted, under the 1989 programs included: corn, 10.1 million acres; sorghum 2.9 million; barley, 2.2 million; oats, 300,000; wheat, 9.7 million; cotton, 3.5 million; and rice, 1.2 million.
The agency report said farmers enrolled 171.2 million acres of land used to produce feed grains, wheat, cotton and rice in the 1989 program, which represented 77.8 percent of the 220 million acres in the national base area for those crops. The idled acres are part of the 171.2 million acres that were enrolled.
WASHINGTON (AP) - Monthly output figures by the Agriculture Department for farm-grown catfish show 28.4 million pounds were produced in August, up 5 percent from a year ago.
The average price paid to growers for live catfish delivered to processors was 68 cents per pound, down 12 cents from August 1988, the report said Wednesday.