As crop prices fall, farms relying more on U.S. aid | NWADG: A crop surplus is creating a slump in U.S. grain prices that is worsening to the point where farmers will soon get more in government aid than at any time in the past decade, analysts say.
About $13.9 billion of net farm income this year will be from federal payments, or about 25 percent of total profit estimated at $54.8 billion, according to figures provided by the U.S. Department of Agriculture. That's the biggest payout and highest ratio since 2006, as programs authorized by Congress two years ago cost more than originally forecast.
Farmers will earn less than half what they did three years ago, before global surpluses sent commodity prices plunging. Corn and soybeans, the biggest U.S. crops, are so cheap now that farmers are expecting to lose money on every acre they plant this season. That's putting a bigger strain on government safety nets for agriculture.
"This is a sign of a weak farm economy that is much weaker than even a couple years ago," said Patrick Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri in Columbia.