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Reuters Markets | Tue Aug 25, 2015 2:36pm EDT Related: STOCKS, MARKETS, EARNINGS
U.S. slashes forecast for 2015 farm incomes
CHICAGO
Aug 25 U.S. farm incomes will drop by more than half from their peak two years ago, according to U.S. Department of Agriculture estimates issued on Tuesday that signal deeper pain for sellers of agricultural equipment and land.
The USDA projected farm incomes this year will drop 36 percent from 2014 to $58.3 billion due to declining crop and livestock prices. The forecast is down 20 percent from the USDA's February estimate of $73.6 billion.
If realized, the decline would bring farm incomes to their lowest level since 2002 when adjusted for inflation, according to the USDA. Income will be down about 53 percent from a record high of $123.7 billion in 2013, when crop supplies were tighter.
"The data confirms the deteriorating fundamentals in the farm economy," JP Morgan analyst Ann Duignan said in a note.
Corn futures have lost about 30 percent on the Chicago Board of Trade over the past two years following bumper harvests, while soybean futures are down about 37 percent.
Deere & Co, the largest maker of farm equipment, last week reported that third-quarter profit tumbled 40 percent on weak demand for agricultural equipment and gave a bleaker forecast for fourth-quarter sales.
(Reporting by Tom Polansek; Editing by Meredith Mazzilli)
U.S. slashes forecast for 2015 farm incomes
CHICAGO
Aug 25 U.S. farm incomes will drop by more than half from their peak two years ago, according to U.S. Department of Agriculture estimates issued on Tuesday that signal deeper pain for sellers of agricultural equipment and land.
The USDA projected farm incomes this year will drop 36 percent from 2014 to $58.3 billion due to declining crop and livestock prices. The forecast is down 20 percent from the USDA's February estimate of $73.6 billion.
If realized, the decline would bring farm incomes to their lowest level since 2002 when adjusted for inflation, according to the USDA. Income will be down about 53 percent from a record high of $123.7 billion in 2013, when crop supplies were tighter.
"The data confirms the deteriorating fundamentals in the farm economy," JP Morgan analyst Ann Duignan said in a note.
Corn futures have lost about 30 percent on the Chicago Board of Trade over the past two years following bumper harvests, while soybean futures are down about 37 percent.
Deere & Co, the largest maker of farm equipment, last week reported that third-quarter profit tumbled 40 percent on weak demand for agricultural equipment and gave a bleaker forecast for fourth-quarter sales.
(Reporting by Tom Polansek; Editing by Meredith Mazzilli)