Drought May Reduce Farm Income By $1 Billion

August 26, 1999

Farm income in the eastern part of the country could be reduced $975 million this year from drought. The areas hit hardest are parts of the eastern Corn Belt, Mid-Atlantic and New England regions. Fourteen states have at least two counties with extreme rainfall deficits, says USDA.

Drought combined with heat has slashed crop yields, reduced livestock productivity and raised death rates for some livestock, the report adds. The $975 million figure was based on information as of Aug. 16. The potential farm income reduction in drought states could reach $1.1 billion, reflecting both shrinking farm receipts and higher expenses for feed and utilities.

Higher yields and production for commodities not affected by the weather may offset the negative impacts of drought on overall financial prospects in 1999, according to USDA. The potential farm income reduction represents a 55% decline from 1998 in Pennsylvania and a 42% decline in New York. For the region, commodity receipts should decline 3% while shrinking receipts and higher expenses combine for a 19% reduction from 1998 farm income.

The report is included in the August issue of USDA's Agricultural Outlook magazine.