A prediction that farm income in Nebraska will plummet by 45 percent this year is a reminder of just how lucrative agriculture has been in the recent past.
It’s also a reminder of the volatility in the agricultural sector, where dramatic swings are the norm.
In fact the ink was scarcely dry on the new three-year outlook before corn prices jumped to a one-year high after federal forecasters lowered their estimate on how much of the grain will be harvested this year. Soybean prices also rose.
The state’s economy is closely linked to the fortunes of agriculture. One in three or one in four jobs are linked to farming and ranching, according to various academic studies. About 92 percent of the state’s land is devoted to farming or ranching.
The latest forecast from the Bureau of Business Research at the University of Nebraska-Lincoln and the Nebraska Business Forecast Council was a sharp drop from the 7 percent decline in farm income the organizations predicted earlier this year.
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Most Nebraskans wisely are reacting as counseled by Brad Lubben, an extension policy specialist at UNL who was one of the contributors to the report.
Lubben referred to current conditions as an “adjustment time” for ag producers. “It’s not a crisis, but it is a time for carefully managing farm operations and finances.”
In 2013 Nebraska’s net farm income reached $8.37 billion, according to Eric Thompson, associate professor of economics and director of the Bureau of Business Research.
Net farm income in Nebraska dropped about 24 percent to $6.35 billion in 2014. The current projection for this year is $3.52 billion. The bureau and council predicted the following two years would stabilize at $4.1 billion in 2016 and $4 billion in 2017.
While the weather is always a determining factor in crop production, Nebraska farmers have some protection from vagaries in rainfall. With center pivots and surface irrigation available on 8.4 million acres, Nebraska has more irrigated farmland than any other state. That proved immensely valuable in the drought of 2012, when Nebraska farmers were able to bring in a harvest while farmers in other states saw their crops wither in the field.
It will be a few more months before farmers pull their giant combines out of the implement sheds. A lot can happen.
Meanwhile across the state green fields of corn and soybeans stretch to the horizon, leaves waving gently in the humid breeze. If farmers are sweating, it's because of the weather -- not the latest income projections.
