AUGUST 30, 2002 USDA PREDICTS SHARP DECREASES IN 2002 FARM INCOME, FARM BILL COSTS USDA's Economic Research Service (ERS) estimates net farm income will plunge to $35.2 billion in 2002 from $45.7 billion in 2001, mainly due to a large drop in livestock receipts and declining government payments.
The largest declines in cash income are expected for hogs, dairy and wheat farms while average net cash income is forecast to slightly increase for corn farms, according to ERS.
Loan Deficiency Payments (LDPs) are projected to drop to $2 billion in 2002, which represents around $3.4 billion less than in 2001 or a 62.8% decline.
Overall direct government payments are forecast to drop $4.5 billion in 2002 due to higher crop prices resulting from extreme drought impacting a majority of the country.
The USDA's forecast contradicts CBO numbers released this week, which show a $2 billion increase in farm bill costs based on outdated July crop conditions.