US farm income to fall to nine-year low: USDA

OREANDA-NEWS. August 26, 2015. Total US farm income will drop to \\$58.3bn in 2015, down by 36pc from the 2014 estimate and marking the lowest level since 2006, according to the US Department of Agriculture (USDA).

If realized, the income figure would be a 53pc fall from the record \\$123.7bn mark seen in 2013. The 2015 income estimate released today is 21pc lower than the USDA's initial projection from February.

Lower corn, soybean and wheat prices have been drivers for the decline, with crop receipts expected to drop from 2014 for all three commodities. Corn prices have steadily moved downward since peaking in 2012, when the average farm price topped out at a record \\$6.89/bushel, because of successive bumper crops. Average farm prices for corn are projected at \\$3.65/bushel for 2015, which is the lowest since 2009.

The lower grain price environment has fueled concerns that growers will further cut back on fertilizer purchases as a belt-tightening measure. US farmers will spend an estimated \\$26.1bn on fertilizer in 2015, down by 7pc from 2014 and the lowest level since 2011, according to the USDA.

Lower fertilizer prices are part of the reason. Average prices for granular urea, ammonia, DAP and potash are all lower so far in 2015 when compared to 2014. Average granular urea prices are down by \\$45/st to \\$307/st fob Nola, DAP prices are down by \\$13/st to \\$428/st fob Nola and potash prices are down by \\$16/st to \\$337/st fob Nola. West Corn Belt ammonia prices have averaged \\$587/st fot in 2015, down by \\$8/st from 2014.