Farmers take biggest income hit in 35 years

By Marisol Bello~USA TODAY

The U.S. Department of Agriculture forecasts farm income of $49.1 billion in 2009 when adjusted for inflation. That would be a 39% drop from 2008, a record year when U.S. farmers earned $80.4 billion after expenses.

It would also be the worst annual percentage drop since 1983. In dollars, it would be the worst since 1974, adjusted for inflation.

Consumers are benefiting a little from farmers’ troubles, says Richard Volpe, a researcher in the Department of Agricultural and Resource Economics at the University of California-Davis. Supermarket prices on pork and dairy products are down, he says, but nowhere near as much as the drop in prices farmers are getting for their products.

Volpe says competition among supermarkets battling for consumers in the recession has more to do with the falling food prices.

The average retail price of a gallon of milk was $2.98 in August, compared with $3.89 in August last year, according to the Bureau of Labor Statistics. Meanwhile, dairy farmers saw the average price they got for every 100 pounds of milk drop to $11.80 in August from $18.40 a year earlier, according to the USDA.

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