FARM FINANCIAL CONDITIONS * Net cash farm income is expected to be more than $50 billion for the fourth consecutive year. Two to five billion dollars higher crop receipts will push cash income up 2 to 4 percent to the mid-$50 billion range. * The combination of record-high crop sales and record-tying livestock sales is projected to raise total sales by $2-$4 billion to a range of $160-$163 billion in 1990. Direct payments to farms may fall by $1 billion or more as disaster assistance declines from nearly $3 billion to less than $1 billion. Total government payments this year will decline to 4 to 6 percent of total gross farm income, down from nearly 10 percent in 1987. * A 15 percent expected decline in feed costs will offset 2-4 percent increases in fertilizer, fuels, repairs, and depreciation. Interest expense is expected to remain stable for the fourth consecutive year, illustrating farmers' more conservative approach to financing. Total production costs are expected to remain stable at around $141 billion. * Net cash income per farm is expected to increase in 1990 from both farm and off-farm sources. Income from off-farm sources will continue to comprise over 50 percent of average per farm income. But off-farm income will be less than 20 percent of income for commercial farms ($40,000 or more of annual sales). * Farm equity is expected to rise 4-5 percent in 1990. Farm assets likely will increase, due mainly to an expected 4-7 percent increase in land values. Farm debt is expected to increase by 1 percent, ending a 6-year trend in annual debt retirement. * Farm assets and equity per farm and per commercial farm are expected to increase about 5 percent in 1990, while farm debt per farm may increase only slightly. * The debt-to-asset ratio may decline slightly in 1990 for the fifth year in a row. The net cash income-to-debt ratio is expected to remain stable in 1990. * As of January 1, 1989, farm operator households classified as vulnerable to stress remained nearly equal to the year earlier level. * Net outlays for U.S. farm programs in fiscal 1991 under current law are expected to increase by over $3 billion, due mainly to increased direct cash outlays. |