Corn Growers Challenge USDA Farm Income Projections: "There They Go Again"

(Note from MC: USDA deceives and distorts - Farmers are in poverty!)

February 10, 2003

News From The American Corn Growers Association

Larry Mitchell: 202-835-0330

John Dittrich: 402-368-7786

http://www.acga.org

acga@acga.org

Tilden, Nebraska - John Dittrich, National Policy Analyst for the American Corn Growers Association (ACGA) today expressed his reaction to last week's USDA release of initial 2003 net farm income forecasts.

"As they have many times in the past, these figures caused raised eyebrows and consternation in farm country," explained Dittrich.

"While the New York Times recently reported on the general decline and massive exodus from rural America, USDA again painted a rosy picture of a projected 39-percent increase in Net Farm Income in the U.S. in 2003.

Dittrich first officially challenged USDA Net Farm Income figures in Washington, D.C., in 1992, while working with Nebraska Farmers Union.

He has had a particular interest in them since, and has more knowledge than most about how USDA figures are assembled and what they represent.

Dittrich's response to USDA release was, "There they go again."

Dittrich went on to explain that USDA Net Farm Income figures actually do little to educate the public about what is really going on in farm country. "In fact, I consider the Net Farm Income figure as a rather meaningless measure of the income of actual farmers -- or 'farm operators' as USDA would define them. The USDA composite Net Farm Income figures include curious categories, which most farmers would not consider income, such as 'Non-cash' income for example. This figure includes the 'potential rental value' of farmers' homes if they did not live in them."

Dittrich says other figures tabulated by USDA appear to be more representative of the true picture of farmers.

These figures are the "Average Income to Farm Operator Households," which are published monthly with little or no fanfare, and were covered by an Omaha World Herald article in September 2002.

These USDA statistics say that on a national average basis, farm income to the average farm household was $2,622 in 2002, a 51-percent decline from the previous 4-year average. Even if this figure increased 39 percent as USDA projects for "Net Farm Income" in 2003, it would still be only about 2/3rds of the previous 4-year average. "And as a farmer, that projected increase appears unlikely to me, since the slightly higher prices we are receiving look like they will be wholly offset by lower government payments," says Dittrich.

Dittrich explains that the "Farm Operator Income" figures are skewed somewhat by very small farmers. "However, it is interesting to note that if you multiplied the 2.1 million farmers in the USDA data base by their average farm income in 2002, you arrive at a national composite "Net Farm Income of Farm Operator Households" of 5.5 billion dollars."

This contrasts with USDA's "Net Farm Income" figures of 36.2 billion dollars in 2002.

Dittrich concluded by saying, "It appears to me that according to USDA figures, American farmers and ranchers earned about 5 billion dollars for producing all the food in this country in 2002, which was sold to the consumers for over 800 billion dollars. And that 5 billion dollars includes all their labor, risk, and return on investment from the over 1 trillion dollars of farm assets used by farmers to produce that food."

"If that's the case, that's the real story of "Net Farm Income."

For more information please visit the ACGA website at http://www.ACGA.org