Farm income has fallen with the drop of crop prices from the record highs of 2011 and 2013, but Eric Thompson, director of the UNL Bureau of Business Research, says those prices are settling as a sustainable level.
“So, what we’ve seen over the last few years as crop prices have retreated from unusually high levels back to more long-term levels that the farm income has retreated as a result,” Thompson tells Nebraska Radio Network.
The Bureau’s long-term economic forecast predicts another down year for agriculture, before it begins to grow again. The forecast looks three years into the future. Thompson develops the forecast along with the Nebraska Business Forecast Council, a group of economists who work for UNL, the University of Nebraska at Omaha, utilities and various state government agencies.
Net farm income dropped to $4.57 billion in 2015, a drop of nearly 40% from its peak in 2013 of $7.5 billion. The economic model predicts another 11% drop next year before the rebound begins; down to a six-year low of $4 billion in 2016. Farm income is expected to grow 3.3% in 2018 to reach about $4.7 billion.
The bottom line, according to Thompson, is that even though farmers and livestock producers might have to suffer through another down year, they can expect prices to stabilize and incomes to rise, long-term. And that, Thompson says, bodes well for the state economy.
“Agriculture is a growing sector, it’s a technology sector in Nebraska, it’s an export sector, it’s got a bright future in the growing global economy.”
AUDIO: Brent Martin reports [:50]