Farm Income and Costs: 2009 Farm Sector Income Forecast

Overview 2009 Farm Sector Income Forecast (Updated 8/27/09) 2008 Farm Sector Income Estimates (Updated 10/06/09) Farm Business Income Assets, Debt, and Wealth Farms Receiving Government Payments Data Sources Recommended Readings Recommended Data Glossary

Net Farm Income Forecast To Be Down 38 Percent in 2009

Net farm income is forecast to be $54.0 billion in 2009, down $33.1 billion (38 percent) from the preliminary estimate of $87.1 billion for 2008. The 2009 forecast is $9.6 billion below the average of $63.6 billion in net farm income earned in the previous 10 years.

Net cash income, at $68.2 billion, is forecast down $29.3 billion (30 percent) from 2008, and $3 billion below its 10-year average of $71.6 billion. Net cash income is projected to decline less than net farm income primarily because net cash income reflects the sale of $1.8 billion in carryover stocks from 2008. Net farm income reflects only the earnings from production that occurred in the current year.

Highlights

• After reaching record or near record levels in 2008, all three measures of farm sector earnings are forecast to decline in 2009.

  - Net cash income is expected to fall 30 percent to a level below its previous 10-year average.

  - Net value added is expected to fall from a record $135.7 billion in 2008, but remain near its 10-year average because the drop in expenditures for purchased inputs offset some of the decline in value of production.

- Net farm income, which was a near record $87.1 billion in 2008, is expected to be $9.6 billion below its 10-year average in 2009 as a result of reduced net value added and increased payments to stakeholders.

• Total expenses are forecast to decline for the first time since 2002.

- The 2007 and 2008 increases in farm expenses, at $34.8 billion and $22.5 billion, were the largest year-over-year absolute changes on record.

- The $9.2-billion decline in expenses projected for 2009 would still leave farm expenses 5 percent higher than in 2007.

• The 2009 forecast is for a $40.2-billion decline in cash receipts.

  - This $40-billion decline still represents less than half the combined increase of $83 billion that occurred over 2007 and 2008.

  - Crop receipts would be the second highest on record in 2009, despite an $18-billion drop to $165 billion, following gains of more than 20 percent in each of the last 2 years.

  - Livestock receipts are expected to decline $22.1 billion (15.6 percent) in 2009.

• Government payments are forecast to be essentially unchanged in 2009.

  - The projected decline from 2008 in ad hoc and emergency assistance payments is offset by increases in Milk Income Loss and countercyclical payments.

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In 2008, the farm sector was whipsawed by highly volatile domestic and international macroeconomic forces that were initially favorable to U.S. farmers. Prices of both farm commodities and farm production inputs spiked in the first half of the year and then fell in the latter half. The U.S. farm sector is perhaps more intertwined with the world economy than ever. Demand arising from both the growing populations and rising incomes in other countries has expanded markets for farm commodities and increased competition for critical production inputs such as fuel, feed, and fertilizer.

The record net farm income in 2008 was driven by a large increase in the value of crop production that was only partially offset by rising costs of production for the farm sector. The value of crop production exceeded its previous record (set in 2007) by $31 billion, a 21-percent increase.

Prices of major crops (corn, soybeans, wheat) trended upward in late 2007 and continued doing so in the first part of 2008 as the remainder of the 2007 harvest was marketed. These prices declined in the latter months as the 2008 harvests occurred, but remained high by historic standards.

Exports were strong as a weak dollar relative to other currencies made U.S. commodities more competitive in international markets, and ending-year stocks of many commodities were low. Commodity prices trended downward late in 2008 as the national and world economies softened.

In 2009, crop prices have continued to decline and prices for livestock animals and products have experienced sharp declines. With economic conditions deteriorating worldwide, demand for exports has tailed off, with few options available to expand marketing elsewhere. Sharply declining demand in 2009 has forced farmers to accept prices that are lower than were expected earlier in the year when production plans were made.

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See monthly prices for crops and livestock.

See annual prices for commodities.

Corn production is projected to total near 13 billion bushels in 2009, which would be the second highest on record. Soybean production is projected to be nearly 3.2 billion bushels, which would be the highest on record.

With abundant production and shrinking demand, crop prices have been lower in the 2008/09 marketing year, which includes the 12 months following the 2008 harvest. With large quantities of most grains and oilseeds available to market, lower prices have pulled down receipts and production value from 2008's record level. The value of crop production is projected to decline by 9.8 percent in 2009.

A substantial reduction in milk prices going into 2009 signaled the same outcome for livestock commodities. Prices for animals and their products have fallen in 2009 because of declining exports and a lag in adjusting production for changing market conditions and expectations. Overall, the value of livestock production is projected down by 15.6 percent in 2009.

On the input side, prices are also projected to be lower than in 2008, particularly for most manufactured inputs, feed, and services such as repairs or transportation. Overall, the reduction in gross income will far exceed the reduction in production costs, leaving all net measures of income and output below the record or near record levels established in 2008.

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While the value of crop production is expected to decline in 2009, it is still projected to remain $47 billion above the average value of crop production over the previous 10 years. The total value of livestock production is expected to decline by $21.8 billion, led by an $11.8-billion drop in dairy production and a $7-billion decline in sales of meat animals (cattle, hogs, and sheep). With some offset from lower farm production costs (most notably, feed, fertilizer and fuel) projected in 2009, net value added is forecast to be down $30.4 billion (22.4 percent).

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Feed costs are a large component of livestock expenses, and the exceptionally high prices for feed crops in 2008 were pinching livestock producers. Rising costs cause livestock producers to eliminate their least productive animals and cut back in less profitable areas of their operations. However, in 2009, softening world economies resulted in lower demand for the better cuts of meat, resulting in declining revenues that more than offset declining feed costs.

Net value added and net farm income have followed the value of commodity production over both the long term and in year-to-year fluctuations. Because farmers typically do not vary their production mix dramatically from year to year, purchases of production inputs have been relatively stable. Thus, the direction and magnitude of annual changes in the value of livestock production have arisen primarily from market prices for livestock and livestock products. On the other hand, variability in the value of crop production is determined by both market prices and production levels. Crop production varies with changes in yields due to weather, plant disease, and pests.

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• Commodity production
• Production expenses
• Government payments

See our glossary for definitions of terms.

See the official USDA estimates and forecast tables.

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Declines in Cash Receipts Expected
for Most Crops in 2009

Annual receipts from food grains are expected to decline by almost 29 percent in 2009. This decline mostly reflects an anticipated 35-percent drop in wheat receipts, with wheat expected to account for almost 77 percent of food grain receipts in 2009. Much of the expected decline in wheat receipts from 2008 to 2009 results from a large drop in annual price. U.S. wheat exports are down in the face of large world supplies. U.S. rice sales, on the other hand, are expected to be up almost 5 percent in 2009, the result of expected reductions in foreign rice production and a U.S. record season-average farm price for the 2008-2009 crop marketing year.

Feed crop receipts, which account for 31 percent of crop receipts, are expected to decline about 18 percent in 2009. The decline is led by a 19.6-percent drop in corn receipts, with corn expected to account for 81.5 percent of feed crop receipts in 2009. Declines in 2009 cash receipts are also expected for hay (6.8 percent) and barley, oats, and sorghum (17.6 percent). The annual average prices for feed crops are expected to decline in 2009. The 2009 corn crop is forecast to be the second largest on record and this, combined with reduced corn production in South Africa, Ukraine, Russia, and Mexico , will probably lead to increased U.S. exports. The expected decline in cash receipts will be offset by a projected increase in corn demand for feed and residual use and ethanol.

Oil crop receipts are expected to remain about the same in 2009, with soybeans expected to account for almost 93 percent of receipts. Soybean yields in 2009 are expected to be 2.1 bushels/acre larger than 2008, contributing to projections for a record U.S. soybean crop. Increased EU production of oilseeds is expected to reduce EU demand for U.S. soybeans. Otherwise, overall demand for U.S. soybeans is expected down only slightly. The annual average price for 2009 will be held down by sales commitments made in early 2009 when soybean prices were lower. The value of U.S. peanuts available for sale is expected to be down 12 percent from 2008 as a 32-percent decline in production is offset by large supplies carried over from 2008.

A large decline (38 percent) in cash receipts is expected for cotton lint and cottonseed, due to both lower quantities sold and lower prices. A small increase in world cotton consumption is expected in 2009, but consumption is expected to remain well below the annual averages from 2004 to 2007. Higher yields and acreage are predicted to result in a 3-percent increase in U.S. cotton production in 2009, with a 4-percent increase in upland cotton. A slight increase in cottonseed production is expected in 2009. However, a reduction in the number of dairy cows and increased supplies of other feeds such as distillers' grains and canola meal are expected to lower feed demand for cottonseed. Cotton is expected to account for 2.1 percent of U.S. crop receipts in 2009.

Fruit and tree nut cash receipts are expected to decline by about 11 percent in 2009. Overall prices are expected to remain fairly stable as higher anticipated prices for fresh oranges, grapes, peaches, and strawberries will offset anticipated declines in prices for fresh lemons, apples, and pears. U.S. peach production in 2009 is expected to decline 5 percent, mostly due to a diminished California crop. Projected declines in cherry prices reflect large expected increases for U.S. tart cherries (32 percent) and an expected record crop for U.S. sweet cherries (52-percent increase over 2008). Delays are expected to result in smaller harvests of Valencia oranges in California. A large carryover of apples from the 2008 harvest combined with an above-average harvest in 2009 is expected to soften apple prices. An expected decline in the 2009 pear price reflects the large apple (a substitute for pears) supply and lack of international demand for pears. A projected dropoff in Mexican grape imports is strengthening U.S. grape prices in 2009. Fruit and tree nuts are expected to account for 10 percent of 2009 U.S. crop receipts.

Vegetable receipts, a bright spot this year, are expected to increase 7 percent from 2008. Backed by a record processing tomato crop and greater canning/freezing sweet corn production, output and value of processing vegetables may approach record highs in 2009. Although reduced acreage and cool weather slowed fresh vegetable shipments during the first half of 2009, receipts were buoyed by prices that were about 10 percent above their levels a year earlier. Although fresh vegetable shipments increased with favorable summer weather, receipts will likely remain steady since lower prices are expected over the latter half of this year. Lower prices are also expected in the second half of the year for potatoes as flat export volume, sluggish foodservice demand, and little change in production weigh down cash receipts. The price of dry edible beans hovered near 2008 levels during the first half of 2009 but is expected to average below year-earlier levels over the remainder of the year. While prices for dry edible peas declined 27 percent over the first half of 2009, lentil prices were up 3 percent due to limited supplies and strong export demand. In 2009, vegetables and melons are expected to account for 13 percent of total crop receipts.

Global Economic Uncertainty and Reduced Prices Drive Animal Sector Receipts Down in 2009

Cash receipts for livestock, dairy, and poultry are forecast to be $119 billion in 2009, down 15.6 percent from 2008, with declines in sales across all major livestock categories. The U.S. animal sector is projected to account for 41.9 percent of total agricultural cash receipts in 2009, down from 43.5 percent in 2008.

Soft consumer demand is expected to dramatically reduce milk prices for farmers in 2009. When coupled with reductions in the U.S. dairy herd, dairy cash receipts are projected to be down 34 percent from 2008 levels. While milk supplies are forecast to remain similar to last year, farm prices for milk are expected to decline significantly for much of the year. A slight price recovery is expected toward the end of 2009 as excess cows are liquidated. Weaker global demand for dairy products, a strengthening U.S. dollar, and drought recovery in Australia and New Zealand are expected to stifle export growth in the U.S. dairy sector in 2009.

Cash receipts for cattle and calves are expected to decrease 10.1 percent in 2009. The July 1, 2009 U.S. cattle and calf inventory was 1.5 percent lower than the previous year's, and the lowest since the series began in 1973. Cattle-on-feed inventories on July 1, 2009 were the lowest since 1999. Net placement of cattle in feedlots of 1,000-plus head during June 2009 was the second lowest for a month since December 1995. All this reflects the ongoing national cow herd liquidation and long series of mostly negative feeding margins since May 2007. U.S. beef exports continue to be hurt by weakened foreign economies. The U.S. is expected to export about 1.7 billion pounds of beef in 2009, a 9-percent decline from 2008. Beef exports declined slightly in the second quarter of 2009 due to weaker demand from Canada, Mexico, and South Korea. However, a weak U.S. dollar relative to the yen and expensive Japanese beef have helped U.S. beef exports to Japan improve this year.

Hog producers' cash receipts are expected to decrease 13 percent in 2009. The global recession has reduced both domestic and foreign demand, resulting in low pork and hog prices. Summer 2009 prices were lower due to weak demand, and second-quarter pork exports dropped 31 percent from second-quarter 2008 as Asian market demand weakened. For 2009, the USDA expects hog prices to average $40-$41 per cwt, almost 15 percent below 2008's prices. Commercial pork production in 2009 is expected to be more than 2 percent below production in 2008, but the sharper decline in pork demand accounts for the projected decline in hog receipts.

Cash receipts for broilers are anticipated to decline 2.6 percent in 2009. Broiler meat production declined sharply in the first half of 2009, while second-half production is expected to be only slightly lower than the second half of 2008. Exports of broiler meat are expected to decline. Cash receipts from egg production are expected to decrease around 24 percent in 2009. Although feed and energy prices are lower, a drop in egg prices discouraged producers from increasing egg production. Even with U.S. egg prices forecast down from 2008, egg exports are expected to decline, especially to Japan.

Production Expenses Forecast To Achieve First Year-Over-Year Decline Since 2002

Following an increase of $22.5 billion (8.4 percent) in 2008 to a record-high $290.0 billion, total production expenses are forecast to decrease $9.2 billion (3.2 percent) in 2009 to $280.8 billion, the second highest level ever. This drop would be the first since 2002. Between 2002 and 2008, expenses rose $99 billion (52 percent). Given the magnitude of the increase in cost experienced in this 6-year period, the reduction projected for 2009 is welcomed, especially since gross income is slated to fall 10 percent in 2009. Despite the decrease, forecast expenses for 2009 would constitute the largest percentage of gross farm income, 84 percent, since 1984.

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Feed, fertilizer, and fuels/oils should drop more than $3.0 billion apiece in 2009. Livestock and poultry purchases are the only other expense that will fall more than $1 billion. Expenses on four other items are forecast up more than $1 billion: seeds, interest, net rent to nonoperator landlords, and capital consumption. Sizeable reductions in prices paid for inputs, especially the 30-percent fall in prices paid for fuels, are the primary factor in the decreases. Regarding quantity factors, total output is expected to increase slightly in 2009, as crop output rises 1.8 percent and livestock output drops 2.0 percent.

After rising $5.0 billion (12 percent) in 2008 and $18.9 billion (67 percent) over the last 3 years, feed expenses are expected to drop $3.1 billion (6.7 percent) in 2009. The decrease is due to a combination of a projected 4.8-percent fall in prices paid for feed and the 2.0-percent decline in livestock output. Prices paid for grains used as feed are forecast to fall nearly 20 percent. Because corn accounts for around 90 percent of feed grains used for feed and soymeal is the principal oil crop product used as feed, prices paid for grain feeds depend mainly on the prices for these two commodities. The forecast 2009 calendar-year average prices of both are down 16 percent. Despite these drops, however, prices paid for complete feeds have risen 15 percent since the beginning of the year. These persistent prices have kept the prices paid for all feed from declining further. On the quantity side, the number of grain-consuming animal units (GCAUs) for the calendar year is forecast down 3.2 percent. Cattle-on-feed are expected to be lower in each quarter in 2009 than they were in 2008 as both net placements and total supply decline 4 to 5 percent. Pork and broiler production are forecast down 2.4 percent and 3.8 percent respectively. Milk production is expected to decrease 1.1 percent.

Livestock and poultry purchases are forecast to drop $1.4 billion (8 percent) in 2009. Since cattle and calf purchases account for more than 75 percent of this expense, the situation in this market has the biggest effect on these purchases. Presently, the impact of the current economic downturn, which is dampening beef demand and exports, is outweighing the positive effects of declining feed costs. In January 2009, the ERS High Plains Cattle Feeding Simulator showed losses of more than $24/cwt on fed steers marketed during that month. Due to these negative conditions, the price of feeder steers in 2008 fell to its lowest level in December 2008. Starting with fed steers sold in April 2009, lower feed costs and feeder prices put cattle feedlots in a profitable position for the first time since May 2007 (Livestock, Dairy, and Poultry Outlook, May 2009). In response to the expected continuance of lower feed costs and a resultant rise in demand for feeder cattle, prices for feeders have started climbing and are forecast higher in the fourth quarter of 2009 than they were in the fourth quarter of 2008. Demand for feeder cattle will be dampened to some extent, though, by low fed-cattle prices. Prices paid for milk cow replacements were trending down in late 2008 and have fallen 34 percent since December as a large number of cows are being sent to slaughter because of projected low milk prices in 2009. Lower product demand and lagging exports are forecast to cause the annual average farm price for hogs to be down 9 percent (Livestock, Dairy, and Poultry Outlook, July 2009). Prices paid for feeder pigs soared during the first 4 months of 2009 before sinking nearly 62 percent by July. The price of broilers is forecast to be up.

After rising $8.5 billion (21 percent) in 2008 to $49.4 billion, the principal crop-related expenses are forecast to fall $3.2 billion (6 percent) to $46.2 billion in 2009. Seed expenses are up significantly but fertilizer expenses are set to decline much more. One indicator of crop-related expenses, acres planted of the 14 principal field crops, is projected to fall about 1 percent in 2009. Field crop production is forecast to be 2.7 percent higher. Production of fruits and nuts will decrease while production of vegetables and greenhouse/nursery products will increase a small amount.

Following an increase of $2.5 billion (20 percent) in 2008, seed expenses are forecast to rise another $2.2 billion (14.5 percent) in 2009. Seed prices have been rising rapidly since 1999 because of biotechnology advancements and the resultant improved yield potential (Crop Production Cost and Outlook, FAPRI). Since then, prices paid for seeds have risen 146 percent, with 64 percent of that rise occurring during the last 3 years. Prices paid for seeds increased 26.5 percent in 2008 and are expected to rise another 15.5 percent in 2009. In April 2009, the price of hybrid corn seed was up 31.5 percent over April 2008 and the price of soybean seeds had risen 24.5 percent.

After rising $4.8 billion (27 percent) in 2008, fertilizer expenses are forecast to drop $5.6 billion (25 percent) in 2009. These nearly offsetting changes are due almost entirely to the roller-coaster movement of prices paid for fertilizer since December 2006.

Until recently, fertilizer prices had been rising steadily since 2002. The annual average prices paid for fertilizers rose 264 percent through 2008, with sharp increases in 2007 and the first half of 2008. In response, farmers have reduced their fertilizer purchases when possible. Farmers could not avoid the run-up in fertilizer prices during the first half of 2008. However, as prices continued to rise through September, they began to curtail purchases, particularly because the plummet in wholesale prices during the last 3 months of 2008 was not matched by a drop in retail prices. Many farmers held off purchasing fertilizer as they waited for retail prices to come down. Because of this postponement, some purchases that would usually have been made in late 2008 were made in 2009 instead. This pattern could add to fertilizer expenses in 2009 and limit the drop in 2009's fertilizer expenses to less than forecast. The annual average prices paid for fertilizers are currently predicted to fall 18 percent in 2009. But retail prices were still relatively high during the first half of 2009, when operators were forced to purchase fertilizer. By July, fertilizer prices had almost fallen back to 2006 levels and are projected to rise only slightly through the end of the year. With more normal fertilizer prices at the end of the year, farmers will probably return to their normal purchasing patterns in the later months of 2009 and purchase fertilizer for fall operations or prepurchase for use in 2010.

Pesticide expenses are forecast to be up only about $240 million higher (2 percent) in 2009. Prices paid for pesticides should increase 3.0 percent in 2009, but a slight decrease in quantity applied is expected.

Fuel and oil expenses are forecast to decrease $4.9 billion (30 percent) in 2009. Like fertilizer prices, prices paid for fuel rose dramatically between 2002 and 2008. During this period, annual average prices paid for fuel jumped 207 percent and fuel prices registered 6 straight double-digit percentage increases. Prices paid for fuels have fallen since July 2008, however. By the end of December 2008, fuel prices were down 50 percent and stood 31 percent lower than in December 2007. The annual average prices paid for fuel should fall nearly 30 percent in 2009. Refiner Acquisition Cost (RAC), the average price of domestic and foreign oil, remained around $40 through the first quarter of 2009, a drop of 57 percent from 2008. RAC has been slowly climbing through July and is projected to finish the year in the high $60's (Energy Information Administration: Table 2. U.S. Energy Nominal Prices). This rise in prices during the latter part of 2009 is significant because questions about the timing of input purchases on the 2003 Agricultural Resource Management Survey (ARMS) showed farmers purchasing 50 percent of their fuels in the third and fourth quarters. Lower planted acreage in 2009 will likely prompt a reduction in fuel use during the year.

Payments to Stakeholders (Providers of Hired Labor,
Rented Land, and Debt Capital)

Although total expenses are expected to fall in 2009, payments to stakeholders are projected to increase around $2.8 billion (5.7 percent). In 2009, payments to stakeholders will constitute 49 percent of net value added, up from 36 percent in 2008. The ratio of payments to stakeholders to total expenses has been dropping since it reached a peak at 26.5 percent in 1984. In 2009, the ratio should rise slightly to over 18 percent from 17 percent in 2008.

Following a $0.9-billion (5-percent) rise in 2008, employee compensation (hired labor) is forecast to be up around $700 million (3 percent) more in 2009. Farm wage rates are projected to be up around 2.5 percent. Fruit and nut, vegetable, dairy, and greenhouse/nursery operations are the heaviest users of hired labor. The production of fruits/nuts and milk are slated to fall in 2009, vegetable production will likely remain about the same, and greenhouse/nursery production should be up a small amount.

Net rent to nonoperators is expected to rise around $1 billion (11 percent) in 2009. The increase would be the result of a rise of about 3 percent in cash rent, a fall of 9 percent in share rent, a 6-percent increase in landlord government payments, and a sizeable jump in FCIC payments to landlords. The rise in cash rent will occur because cropland rental rates are up 5.3 percent, even though average land values are down (Agricultural Land Values and Cash Rents Annual Summary, August 2009). Acres planted to principal crops are down 1 percent; the drop in share rent follows the decline in the value of crop production.

Interest expenses are forecast up nearly $1.1 billion (7.3 percent) in 2009.

Government Payments Forecast at $12.6 Billion

Direct government payments are expected to total $12.6 billion in 2009, a slight increase from $12.2 billion paid out in 2008. This level would be 20 percent below the 2004-08 average. Direct payments under the Direct and Countercyclical Program (DCP) are forecast at $5.15 billion for 2009. Direct payment rates are fixed in legislation and are not affected by the level of program crop prices. A delayed signup for the 2009 crop shifted some direct payments into calendar year 2009, but was partially offset by reduced direct payments for farmers opting for the Average Crop Revenue Election Program (ACRE). ACRE, authorized by the Food, Conservation, and Energy Act of 2008 (2008 Farm Act), provides revenue insurance to producers in exchange for a 20-percent reduction in their annual direct payment allotments beginning with the 2009 crop year. Because producers' enrollments are lower than expected and the enrollment season just ended, the effect of ACRE participation on direct payments in calendar year 2009 is not yet known.

Countercyclical payments are forecast to increase from $712 million in 2008 to $1.23 billion in 2009. The drop in cotton prices in the latter half of 2008 is responsible for this projected increase. Since 2006, only upland cotton and peanuts received countercyclical payments, but only cotton is receiving countercyclical payments in 2009.

Marketing loan benefits—including loan deficiency payments, marketing loan gains, and certificate exchange gains—are projected at $906 million in 2009, up from $316 million in 2008. In 2009, upland cotton producers realized almost 95 percent of the total marketing loan benefits. The other crops receiving marketing loan benefits are wheat, barley, peanuts, wool, mohair and pelts. Although prices have declined from their peaks in 2008, marketing loan benefits are still not available to the remaining program crops at current price levels.

The Milk Income Loss Contract Program (MILC) compensates dairy producers when domestic milk prices fall below a specified level. High prices in 2008 meant that only small program overpayments repaid by producers were recorded. For 2009, current economic uncertainties have reduced both domestic and export demand for dairy products to such an extent that the rapid fall in milk prices is expected to generate $1.1 billion in MILC payments.

Forecast at $740 million in 2009, Tobacco Transition Payment Program (TTP) payments are expected to continue declining beyond 2009, albeit at a decreasing rate. Payments reported here include both CCC payments and lump-sum payments. Begun in 2005, this program provides annual payments over a 10-year period to eligible quota holders and producers of tobacco. Since the inception of the program, lump-sum payments to individuals have been made through agreements with third parties in return for the producers' and quota owners' rights to the 10-year TTP payment stream. While significant lump-sum payments were made in 2005 and 2006, fewer producers and quota owners are currently participating in these buyout agreements.

Conservation programs include all conservation programs operated by USDA's Farm Service Agency (FSA) and Natural Resources Conservation Service (NRCS) that provide direct payments to producers. Estimated conservation payments of $3.23 billion in 2009 reflect programs being brought up toward funding levels authorized by current legislation.

Ad hoc and emergency disaster program payments are forecast to be $260 million in 2009. Disaster payments appropriated under Title IX – Agricultural Assistance - of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, were largely paid out in 2008—hence, the projected 90-percent drop in these payments in 2009. The 2008 Farm Act created a permanent fund for disaster assistance, the Agricultural Disaster Relief Trust Fund. Producers in disaster counties who are eligible for Supplemental Revenue Assistance Payments (SURE) made from this trust fund will begin receiving payments in calendar year 2010.

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See glossary.

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