| In between 2003 and 2007, corn prices went up 87%, soybeans went up 47%, and wheat went up 91% (not accounting for inflation). During that time, total household income went up for farmers by 23%. BUT - the entire increase came from off-farm income. In 2007, the average total household income was $73,260, with 64% of that coming from off-farm income.*
*These numbers and the numbers below are only for the farmers the USDA calls "Farming Occupation-Higher Sales" - i.e. family farmers.
How about net income from farm sales? That went up 47%... to $17,303. It's a nice increase (thanks, high commodity prices!) but it's still not enough to live on. Unfortunately for farmers, the high prices didn't help as much as they might have because of increased cost of inputs (like fuel and seeds) and decreased government payments. While average farm sales went up $5,508, average government payments went down $8,741. That means that the high prices screwed the farmers more than they helped them.
Taken together, income from farming and payments declined from $29,248 to $26,015 between 2003 and 2007. So much for the great boon of high prices to these family farmers. Only the 56% rise in off-farm income made them better off than they were in 2003.
Only farms making over $500,000 in gross sales truly increased in farm income during this period of time.
They jumped from $130,263 to nearly $189,547, easily compensating for their $12,196 drop in government payments between the two years.
In fact, they did so well ON the farm thanks to high prices, they actually decreased in off-farm income. They didn't need it to survive quite so badly anymore.
The USDA suggests that the impressive gain in household income is a sign of the robust health of the farm economy, but these numbers - and any mid-sized crop farmers - would suggest otherwise.
What do Harvie and Wise predict in 2009? Well, not quite the same optimistic picture the USDA paints. They note that projected expenses will be a higher percentage of gross sales than ever before due a slight drop in costs but plummeting prices. |
