For many down on the farm, the wolf is at the door

We hate to sound like the little boy who cried wolf, but for US farmers there really is a wolf out there and that wolf is called low prices. While the pain is not evenly spread across the nation and across farm types, for those involved it is serious. To get a picture of what is happening to farm income, we will look at 3 sources of information: USDA’s “US farm sector financial indicators, 2012-19F”, a University of Minnesota press release “Minnesota farm income hits historic low: Farmers struggled [with] low prices and low profitability in 2018”, and the Federal Reserve Bank of Minneapolis’ “Chapter 12 bankruptcies on the rise in the Ninth District: Low crop and livestock prices also bleeding through to ag bank loans.The USDA’s farm sector financial indicators spread sheet (March 6, 2019) shows the 2018 forecast of net farm income (2018F) at $63.1 billion, down $12.0 billion from the previous year. This is the second lowest level of net farm income since its $123.4 billion peak in 2013, a decline of 48.9 percent.In 2013 Federal Government direct farm payments were $9.8 billion or 10.6 percent of net farm income. The forecast for 2018 has farm payments at $13.8 billion or 21.8 percent of net farm income. Crop insurance payments to farmers for losses are included in net farm income while crop insurance subsidies are not. Farm equity of $2.621 trillion in 2018F is $161.1 billion higher than it was in 2013 while the debt-to-equity ratio has increased from 12.8 percent (2013) to 15.7 percent (2018F). The 2019F debt-to-equity ratio increases to 16.1 percent.