Kentucky's farm income is expected to bounce back slightly from last year's downturn, but remains well below record levels from earlier in the decade due to lackluster prices for many commodities, agricultural economists said Thursday. Jeff Franklin, from the University of Kentucky's College of Agriculture, Food and Environment has this exclusive report.
Higher crop yields, improved livestock prices and fairly stable input costs helped the state's farm sector regain some of the lost income, University of Kentucky ag economist Will Snell said.
"After some challenging years ... at least we feel like the bleeding has slowed down," Snell said. "I don't know if it's stopped or not, because we've got a lot of challenges."
The ag forecasts by Snell and other UK economists have become a fixture at the Kentucky Farm Bureau's annual meeting in Louisville.
The economists said they don't foresee a more drastic rebound in Kentucky next year, though they predicted a slight uptick in agricultural cash receipts. Prices for most ag commodities are likely to remain relatively low in 2018, barring some disruptions in supplies, they said.
Modest gains were forecast for the coming year in poultry, horses and soybeans, offsetting expected losses in tobacco, corn and cattle, Snell said.
Kentucky's net farm income — the amount left after expenses — is expected to increase slightly to between $1.1 billion and $1.2 billion in 2017, the economists said. That's up from last year's level of about $1 billion but well off the $2.1 billion average from 2013 to 2015.
Statewide ag cash receipts in 2017 are forecast at $5.6 billion, up 3.5 percent from 2016 but well below the $6.5 billion level in 2014, they said. The forecast for 2018 is $5.7 billion, assuming a normal growing season.
On the production end, farmers benefited from robust harvests, state Agriculture Commissioner Ryan Quarles said at another Farm Bureau event. But that was only half the story.
"Most of our crops did very well; sometimes record yields across the counties," Quarles said. "But prices are still suppressed."
Poultry production remains Kentucky's top agricultural commodity, accounting for 20 percent of projected 2017 sales, the economists said. The state's world-renowned equine sector is second, followed by soybeans, cattle and corn.
Tobacco, once the king of Kentucky agriculture, rebounded from a poor 2016 crop, and sales are expected to once again exceed $300 million in 2017, Snell said. But tobacco is expected to contribute just 6 percent of the state's overall ag cash receipts in 2017.
Glenn Burton, a livestock and soybean farmer in Wayne County, said it was a mixed bag for him this year, with better grain yields offset by improved but still-sluggish cattle prices. He'll end up making about the same amount in 2017 as a year ago.
Times aren't nearly as good as three or four years ago, but he's still optimistic.
"The cattle business is showing some promise," he said in an interview. "I feel pretty good."
Another positive trend was that Kentucky agriculture benefited from strong export markets this year, Snell said. Any trade talks between Washington and other government could have a significant impact on Kentucky farmers, he said.
"Any future disruption in trade will likely put additional downward pressure on agricultural prices in the midst of ample global supplies," Snell said.