While the government’s first forecast of net farm income for 2017 projects a slowing rate of decline, the outlook from USDA’s Economic Research Service shows how four years of falling income impact ag’s bottom line.

Revenues are down and costs are up. But unlike the 1980s, the current trouble for farmers is a failure of profits, not debt. Margins are even lower than they were during the farm crisis. Farm program payments could be even more important this year, accounting for 20% of net farm income. But after strong payments under the Agriculture Risk Coverage–County program for corn in 2014 and 2015, USDA estimates direct government payments will be down 4%. Our research shows ARC-CO guarantees for corn and soybeans will be sharply lower for 2017 crops, reducing potential payments significantly.