Ag Economists Upbeat
WASHINGTON (AP) _ Economists in the Agriculture Department said Friday they think that a moderating rate of growth may enable the U.S. economy’s current expansion to continue ″past 1989.″
″Fewer new jobs, relatively flat retail sales and slower industrial output point to a slowing economy,″ the deprtment’s Economic Research Service said. ″However, the expansion is supported by continued improvement in the next export deficit, which likely will induce businesses to invest further in new plants and equipment.″
The agency added in its latest outlook report that ″continued rising consumer income should support domestic demand for agricultural products.″ Little change is seen in the interest rates paid by farmers.
Cash receipts for livestock sold this year are up 2 percent to 3 percent from 1987, and crop receipts are up 8 percent because of ″strong prices and large marketings from past years’ inventories,″ the report said.
Recent large payments on farm debt amassed in the early and mid-1980s appear to be over, with loan volumes rising again at commercial banks and the cooperative Farm Credit System, it said. That is taken as an indication that many farmers are gearing up again.
″Except for the Farmers Home Administration, major farm lenders report stronger loan portfolios in 1988, and reductions in farm loan delinquencies, loan charge-offs and foreclosures,″ the report said. ″However, some farmers are still under severe financial stress.″
The agency continued to forecast 1988 net cash income of farmers - the difference between gross cash income and cash expenses - at $55 billion to $60 billion, compared with last year’s record $57.1 billion.
Net cash income is the money farmers have to spend during the year, including cash from sales of crops stored from previous harvests. Many farmers sold off inventories to make up for 1988 drought losses.