Farm Credit East Releases Mid-year Credit Outlook
ENFIELD, CONN., TUESDAY, AUGUST 15, 2017 – Farm Credit East recently released its mid-year Agricultural Credit Conditions report indicating net-farm income in its seven-state region is showing some improvement over the prior year, although it is projected to remain far below 2014’s peak. While several industries, including cash field crops and dairy, continue to deal with low prices, some improvement has occurred. The nursery and greenhouse industries are bright spots in the outlook.
Overall U.S. agriculture, as well as that of the Northeast, faces both opportunity and challenge in the current economic climate. Tight margins, labor availability, production costs and the ever-changing weather remain the top concerns across all industries.
Dairy, Northeast agriculture’s largest sector, continues to face marketing challenges and low margins. However, some modest price recovery has occurred in dairy markets, and analysts project that 2017 milk prices will average about $2.00 per hundredweight above last year.
Weather conditions have also been a major concern. Fruit production in some locations has been hurt by hail damage and other adverse weather events. Many crops are behind schedule after a prolonged wet and cold spring delayed planting in some areas.
The Farm Credit East Northeast Production Cost Index, which tracks the costs of a number of agricultural inputs, is slightly lower, year-over-year. Reduced costs will help producers preserve at least some margin in a period of low prices. It is essential for producers to watch margins closely and make adjustments necessary to maintain profitability.