wsj: usda sees farm profits plunging 38%

Looking for a turn around in fertilizer prices? Not this year in any significant way ... this has been a punishing year for farmers and their remaining equity levels after it. 2010 fertilizer purchases are going to be move back to a 'just in time' basis and at conservative rates. Lots of crop land will move back to pasture based systems meaning you could even skimp a year of fertilizer on those hectares while grain prices firm.

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WSJ: USDA Sees 2009 US Farm Profits Plunging 38% To $54B
10:20 AM, August 27, 2009

By Scott Kilman
Of THE WALL STREET JOURNAL


The U.S. Agriculture Department said Thursday it expects net farm income, a widely-followed measure of farmer profitability, to plunge 38% this year to $54 billion.

The bursting of the farm commodity price bubble late last year means that U.S. farmers will see their collective earnings sink by $33.2 billion from last year's estimated net farm income of $87.2 billion, which was nearly a record
high.

(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)

The appearance of the global recession last year has softened foreign demand for U.S. agricultural goods. At the same time, the outlook for bumper harvests this fall is weighing on commodity prices. U.S. corn farmers are projected to harvest about 13 billion bushels, which would be the second-highest ever. Soybean farmers are expected to harvest a record-large 3.2 billion bushels. The
prices farmers are receiving for everything from milk to livestock are also depressed.

Adding to the pain for farmers is that the size of the federal aid they will receive this year will be a relatively low $12.6 billion, according to the USDA
forecast. Although commodity prices have sunk sharply from last year's high levels, prices of many farm goods are still above the levels that earlier this decade triggered far bigger direct government payments to farmers.

In 2005, for example, government payments to farmers reached $24.4 billion.