Fed checks help farmers amid dreadful year

DES MOINES, Iowa — Thanks to the government paying nearly 40% of their income, U.S. farmers are expected to end 2020 with higher profits than 2019 and the best net income in seven years, the Department of Agriculture said in its latest farm income forecast.

Farmers f aced challenges throughout 2020 that included the impact of trade disputes; low prices that drove down cash receipts for corn, cotton, wheat, chicken, cattle and hogs; and weather difficulties.

Farm cash receipts are forecast to decrease nearly 1% to $ 366.5 billion, the lowest in more than a decade, measured in real dollars. Direct federal government payments saved farmers’ bottom lines: Farmers overall saw a 107% increase in direct payments from 2019, when a third of net income came directly from the government.

The impact of the money varies from one farm to another, depending on whether a farmer owns the land, has significant capital to draw from, has manageable debt and aggressively manages wide commodity price swings.

“The payment to one farm could be a matter of life and death of that farm and for another farm maybe just makes it not quite as bad of a year as it was going to be and everywhere in between,” said Mike Paustian, a farmer in eastern Iowa.

Excluding USDA loans and insurance indemnity payments made by the Federal Crop Insurance Corporation, farmers are expected to receive $ 46.5 billion from the government, the largest direct- tofarm payment ever. That includes $ 32.4 billion in assistance through coronavirus pandemic relief food assistance and Paycheck Protection Program payments to farmers.

Additional support comes from more traditional revenue loss programs due to low commodity prices, compensation for trade disruptions resulting from tariff battles and conservation programs assistance.

Overall, net farm income in the United States is expected to increase 43% from 2019 to $ 119.6 billion, the USDA estimated.