Late last week, the Farm Credit Agency issued its quarterly report on the economic conditions in American agriculture. The report says for the past several years, government payments have played an important role in the farm economy and making up an ever-increasing share of farm income.
“For 2020, about two-thirds of government payments are coming from ad hoc and supplemental assistance programs,” the report says. “While substantial ad hoc government payments are helping a lot of producers this year, there isn’t a guarantee that they’ll get the same level of help in 2021.”
Cash receipts in 2020 are forecast to decline by 3.3% to $358.3 billion. Looking at the overall Farm Credit System, the FCA says it is safe and financially sound. Cash expenses are down 1.3% due to lower interest expense. Portfolio credit measures were more mixed, but there are indications of a slight increase in stress on portfolios in agriculture. System earnings were strong and continue to support additional capital growth.
The FCA says system institutions across the country are in good shape to help support and grow the farm economy and communities in rural America.
(From the National Association of Farm Broadcasters)