The income from agriculture in the U.S., projected to fall by 38% in 2015, which is the sharpest decline since 1983, due to lower prices for grain and livestock, said the economic research Service (ERS) under the Ministry of agriculture of the USA.

Revenues, as forecast, will fall for the second consecutive year to $55.9 billion This level will be the lowest since 2002, when it reached, and signals of further pressure on sellers of agricultural inputs, equipment and land.

The updated forecast has dropped compared with the August estimate of $58,3 billion and is 55% below the record $123,3 billion in 2013, almost a record high grain prices have increased the profit from agriculture.

It is obvious that what is happening with global food prices and the global economy began to penetrate the us sector of agriculture, according to ERS economists. Over the last three years there was a decrease in the price index for food and fiber. These prices are starting to affect American farm.

Corn futures on the Chicago Mercantile exchange fell by more than twice from its record highs of 2012 after the bumper harvests in the US and South America. Soybean futures reached a six-year-and-a-half low amid ample global supply.

Shares of manufacturers of agricultural machinery, such as the us market leader Deere & Co, fell this year in response to the declining sales during the downturn of the agricultural economy. Producing seeds and agrochemicals company Monsanto company announced in October on the reduction of 2,600 jobs and restructuring of enterprises to reduce costs amid slumping commodity markets.

Income from agriculture has declined mainly due to lower prices of cereals and livestock, which has reduced the cash income from harvest in American farms by 8.7% to $18.2 billion and income from cattle by 12% to $25.4 billion, the report said ERS.

This decrease was only partially compensated by a decrease of $7.7 billion in production costs, 2% lower and an increase of $1 billion in government payments to farmers through programs such as crop insurance.

ERS predicts an increase in agricultural debt by 6.8%, while agricultural assets such as land and machinery, will drop by 2.8%.

Source: Thomson Reuters