Drought Hits Farm Incomes

Despite reports that US farmers may see record incomes and profits this year, despite the worst drought in recent memory, the US Department of Agriculture is estimating that farm incomes will dip by around 3 percent, largely due to the major crop losses incurred over the summer and fall.

For the past several months, farmers across the country have struggled with extreme drought conditions. More than 1,000 counties have been declared disaster areas and more than 1/5 of the country is still experiencing severe to extreme drought conditions.

The extreme weather has led to massive crop losses and skyrocketing operation costs (especially for livestock farmers whose feed costs have gone through the roof). The losses, however, have been partially offset by generous crop insurance programs (which have covered much of the crop losses) and the sharp increase in the price of grains like corn and soybeans.

These reports are masking some of the major losses that farmers across the country have experienced. So far, crop insurers have paid out more than $6 billion, with some estimates placing the potential final cost at nearly $20 billion.

The steep increase in livestock feed has also blunted farm incomes (feed costs, for example, are up by more than 18 percent).

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Written by: Justin Ellison / Farm Plus Staff Writer