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Farm income to drop 20% in 2006, USDA says
By Padraic Cassidy, MarketWatch
Last Update: 4:20 PM ET Nov 30, 2006
http://www.marketwatch.com/News/Story/Story.aspx?siteid=mktw&guid=%7B640E4CA
F-4250-4AA5-A4A0-FD53DEDBFA40%7D&

NEW YORK (MarketWatch) -- Net farm income in the United States is expected
to total $58.9 billion in 2006, a 20% drop from last year, the Department
of Agriculture said Thursday.

A $4.7 billion drop in the value of livestock production, including a
decline in the price for milk, are responsible, according to the updated
forecast from the USDA. The report, Agricultural Income and Finance
Outlook, also cites lower direct government payments and higher farm costs
as reasons for the drop.

Total direct payments from the government are expected to fall to $16.5
billion, 4% below the five-year average, from $24.3 billion in 2005.

The average farm household income should fall 0.9% in 2006 to $80,703, the
USDA said.
Increases in farmland values have lifted farmer equity at a faster rate
than farm debt.

Citigroup analyst David Raso said the income estimate is better than the
previous USDA forecast for a 26.3% decline and is encouraging for an
eventual farm equipment recovery.

Deere shares have risen 41% so far in 2006.
Citigroup said in a note to clients the USDA's 2007 farm income estimate,
still to be compiled, is "expected to rise notably." End of Story

Padraic Cassidy is a reporter for MarketWatch in New York.