U.S. net farm incomes are expected to fall for the third straight year in 2016 in response to years of low commodity crop prices, according to the U.S. Department of Agriculture’s (USDA) Economic Research Service (ERS), reports Farm Futures.

 

The department estimates that overall U.S. agricultural incomes will fall by 3% from $56.4 billion in 2015 to $54.8 billion this year. And although it marks a third year of declining income, the department notes that the rate of decline is slowing compared to the massive 40% slide seen in the previous year.

 

“The main takeaway is that we’re forecasting net cash and net farm income to both be down, but by moderate amounts,” Jeff Hopkins, Chief of the ERS’ Farm Economy Branch told Farm Week Now.

 

“This is an improvement from the double-digit declines seen in 2014 and 2015,” said Agriculture Secretary, Tom Visack reports the Argus Leader. “It reflects a more competitive trade environment, softening projection for global demand and a continuation of the dip in agricultural commodity prices.”

 

The ERS projects that livestock and crop revenues will be down, however other production segments, including turkeys, cotton, rice, sorghum, oil crops, and sugar could see improvements in income.

 

Corn sales are forecast to fall by $800 million to $46.4 billion, however, soybean receipts are expected to see a small increase of $520 million to $35.1 billion. Hog production is expected to continue to rebound following an outbreak of porcine epidemic diarrhea virus (PEDV)  which hit the U.S. herd in 2014 resulting in higher inventories and lower prices with income falling by 5.1% to $18.5 billion. While recovery in egg production after 14 states were hit by a bird flu outbreak last year will see income from egg sales fall by $2 billion to $10.6 billion.

 

Michael Hein, vice president of Liberty Trust and Savings Bank in Durant, Iowa told the Des Moines Register, “This is going to be a telling year,” adding that input prices have remained high compared to income, which means that many farmers will be challenged to meet production costs.

 

“Everything is just disproportionately expensive in relation to the value of the commodities that they raise,” said Hein.