USDA Sees 2016 Farm Income Crashing As Farmer Leverage Spikes to 34 Year Highs
by Tyler Durden
ZeroHedge.com
Sep 1, 2016
The plight of the American farmer has been a frequent topic for us over the past couple of months. A few weeks ago we pointed out how declining corn, wheat and soybean prices were leading to the first declines in farmland values in the Midwest since the 80s (see “Farmland Bubble Bursts As Ag Credit Conditions Crumble”). We also questioned whether California farmland was overvalued by $70 billion as almond prices have been cut in half over the past year and drought conditions threaten farming sustainability in many regions of the Central Valley (see “Is California Farmland Overvalued By $70 Billion?”).
Most food grown in the U.S. has come under extreme pressure in 2016 due primarily to lower Chinese consumption resulting from the combined effect both a weak Chinese economy and a relatively strong U.S. dollar. This slack in demand has resulted in massive supply gluts for several commodities as producers failed to adjust supply quickly enough to meet new levels of demand.
Unfortunately, per the USDA’s latest farming income forecast for 2016 (released yesterday), conditions only look to be getting worse for farmers as demand still remains low but supply has been slow to adjust in the wake of improving yields. Below are a couple of the key takeaways from the USDA’s 2016 forecast.
The Rest…HERE
