The overall 2019 farm income is projected to increase more than ten percent from last year, however much of the reason for the earnings growth is based on various assistance afforded to the agricultural industry. According to a report from USDA’s Economic Research Service (ERS), net farm income is forecasted at $92.5 billion for 2019, an increase of $8.5 billion from 2018. The latest figures mark a significant increase from the first USDA projection for 2019, which expected slightly less than $70 billion in net farm income. However, approximately 30 percent of the projected income amount will be the result of federal farming assistance as well as crop insurance benefits.
Payments made as part of the Market Facilitation Program (MFP) that was developed to assist American farmers and ranchers struggling as a result of the trade tensions with China, will total $14.5 billion for 2019. According to ERS Senior Economist Carrie Litkowski, the funding distributed under the MFP will account for more than half of all direct payments made to farmers. Direct government farm payments are projected to increase by 64 percent, to a total of $22.4 billion in 2019. That figure represents the largest amount administered to American farmers since 2005.
Weather patterns for much of the U.S. compounded the issues created by the increased tariffs from China. The USDA paid out a record $4.24 billion in claims for acreage that farmers were unable to plant this year. The 2019 farm income projection also includes the $6.5 billion provided through federal crop insurance indemnities. That figure, which does not include premiums, makes 2019 the most substantial year for indemnity payouts since 2013.
The agricultural industry is hopeful that a trade deal can be established with China, eliminating the need for continuing federal assistance. While farmers and ranchers would much rather take care of their operations on their own, net farm income would have declined by close to eight percent for 2019 without the federal assistance that was provided.
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