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USDA projects production costs to be higher

USDA analysts project more farm income in 2019, however “we do see expenses going up,” said Warren Preston, deputy chief economist at the USDA, who says there’s also the prospect of a 2.1 percent jump in farm debt.

That’ being led by an increase in real estate debt,” said Preston, in comments provided by the USDA, “and the value of farm sector assets are forecast to decline following a decline following a decline in crop inventories.”

The real estate debt load is expect to rise another five percent with more farmers having to borrow against the equity in their land.

“If got into a repayment problem that’s collateralized by their land,” he said, “that could be a little bit of a concern.”

The projection is for interest, feed and labor costs to be up, but considering lower cost estimates for fuel, rent and livestock purchases, the overall production expense increase is expected to be 0.6 percent.