On Sept. 2, USDA’s Economic Research Service (ERS) released its updated Farm Sector Income and Finances report and projected that farm profits would improve in 2020 relative to 2019. According to the ag agency, the improving bottom line for farmers will result from slightly higher crop receipts, lower production expenses and a hefty increase in government assistance.
Last month USDA announced $16 billion in direct support to farmers and ranchers along with $3 billion of commodity purchases. While Ashish Gupta, analyst for Stephens Inc., sees a possible uptick in ag equipment sales as a result of direct payments, he also sees a downside to the payments.
ERS’s current farm income forecast for 2014 includes $4.4 billion in Livestock Forage Disaster Program (LFP) payments, an over 700% increase from total LFP payments made during the previous 5 years combined.
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In this episode of On the Record, brought to you by Associated Equipment Distributors, Deere Director of Investor Relations Josh Beal told JP Morgan analysts that the OEM is confident it will be “producing to demand” in fiscal year 2025.