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Farmers Reliant on Direct Government Payments in 2020

09/05/2020

According to the USDA-ERS Farm Income and Wealth Statistics report issued on September 2nd, farm cash receipts will decline by 3.3 percent to $358.3 Billion in 2020.  Closure of packing plants associated with outbreaks of  COVID will reduce animal product sales by 8.1 percent ($14.3 Billion).  In contrast, crop revenue will be depressed by 1.0 percent compared to 2019.

 

Direct government farm payments, including federal farm program grants to farmers and ranchers, made by the Federal Crop Insurance Corporation will amount $37.2 Billion, approximately $15 Billion above 2019.  The increase of 66 percent is due to COVID-19 relief.

 

Farm sector equity will increase by 0.7 percent to $2.68 Trillion and assets will increase by 1.1 percent to $3.11 Trillion.  On the debit side, farm debt will rise 3.6 percent to $433.8 Billion and real estate debt will rise 5.5 percent to $281.6 Billion.  Debt-to-asset levels for the agricultural sector have increased progressively since 2012 and will rise to 14.0 percent in 2020.  Working capital will decline 12.8 percent compared to 2019.