By one measure, farm income this year will go higher, while by another calculation, it will be lower than 2019 figures. Both measures come from the U.S. Department of Agriculture. The difference, in part, is whether grain sales are counted when the grain’s grown or when it’s taken to market.

Last week, USDA said net cash farm income will decrease 9 percent, or $10.9 billion, to $109.6 billion this year, compared with 2019.

Meanwhile, in the same report, USDA said net farm income, which is a “broader measure of profits,” will go up 3.3 percent, or $1.3 billion in 2020 compared to $96.7 billion in 2019.

The difference comes because net cash income forecasts include $14.7 billion in cash receipts in 2019 from the sale of grain in the bin, but only $500 million worth of such cash receipts from farm inventory sales is forecast for 2020.

The “net farm income” figures exclude such sales from crop inventories, because it measures crop production in the year it was harvested, not the year when it was sold, USDA economists said in the report issued Feb. 5.

It’s not typical for the two farm income measurements to vary that much, but it’s “not completely unheard of,” USDA economist Carrie Litkowski said, according to Agweek magazine.

Both net farm income and net cash farm income projections for 2020 are near their averages for 2000-2018, a period that includes the big four-year swing into the highest prices ever seen on farms and ranches, 2011-2014, or so. Prices for corn, wheat and soybeans, as well as cattle, went way high during that stretch.

Big factors in 2020 will be a drop in government payments to farmers and ranchers of about $9 billion, plus an increase in cash expenses, Litkowski said in an online presentation about the report last week. The “Market Facilitation Program,” that the Trump administration used to give farmers payments in lieu of estimated losses due to trade wars with China, is not expected to send as much federal funds to farmers this year.

So, direct government payments to farmers are forecast to to decrease from $23.7 billion in 2019 to $15 billion in 2020, a 36.7 percent drop.

While corn and soybean prices will remain low and maybe drop, farmers will get more revenue from corn because they have more bushels of it, while they will get less revenue from soybeans because they don’t have as much to sell, Litkowski said.

That change is going to hurt South Dakota farmers — as well as Minnesota and North Dakota farmers — more than farmers in other parts of the country. The Upper Midwest producers got much more in the ad hoc trade war subsidies last year, according to Litkowski.

By any measure, 2019 wasn’t exactly a bright one for farmers and ranchers. Chapter 12 bankruptcies of family farms were up 20 percent over 2018, the highest year-to-year increase in the past decade except for 2011, according to the American Farm Bureau Federation’s study of court filings. In South Dakota, there were 13 in 2019, compared with 30 in Minnesota, 27 in Iowa, 38 in Nebraska and one in North Dakota.

However, in central South Dakota, including Hughes and Sully counties, farmers reported surprise at how well their crops yielded, despite the late, wet spring. The precipitation at Pierre in 2019 totaled 30.95 inches, 55 percent above the 30-year average. That wasn’t enough, it appears, to swamp fields and ruin crops, as happened across much of eastern South Dakota. Rather, it seemed to give crops in this region, where normally the main concern is drought conditions, the effect of irrigation, pumping up per-acre yields to record or near-record levels, farmers have said.

But prices for crops and livestock haven’t been abnormally high the past year or so.

In January, more than 300 South Dakota cattle producers met in Wessington Springs to talk about what they see as long-term unfair practices in the meat industry that hurt the people raising the cattle.

The South Dakota Farmers Union, which helped organize the meeting, last week posted an article on its website about it.

Philip Wipf, a cow/calf producer from Wessington Springs, said prices received by cattle producers have decreased nearly 60 percent since country-of-origin labeling, or COOL, was repealed in 2015. Many cattle producers in the state say when their product can be clearly differentiated from beef raised in other nations, they can compete better.

Wipf said prices are so low now, there’s not much profit left.

“For the last four years, the margins have gotten tighter and tighter, to the point where there is no margin left,” Wipf said, according to the SDFU. “If it wasn’t for off-farm income, we wouldn’t have enough.”

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