Average Illinois net farm income is expected to drop by 50 percent in 2005 compared to 2004, according to a recent University of Illinois (U of I) Extension study.
"Farm incomes are projected to be over $47,100/farm lower in 2005 compared to actual farm incomes in 2004," said Dale Lattz, U of I Extension farm financial management specialist, who co-authored the study with colleagues Gary Schnitkey and Paul Ellinger. "The 2005 average income will be lower than the previous five-year average income.
"Lower corn yields, lower grain prices and higher input costs are the primary reasons for the lower incomes."
The full report, "Considerably Lower Farm Incomes Projected for 2005," can be read online at farmdoc: http://www.farmdoc.uiuc.edu/manage/newsletters/fefo05_24/fefo05_24.html
The study was based on data compiled from 805 grain farms enrolled in the Illinois Farm Business Farm Management (FBFM) Association.
"Average net farm income in 2005 is projected at $43,600/farm, down by over 50 percent from actual farm income of $90,700 in 2004," said Lattz. "These 805 farms averaged $54,300 from 2001 through 2004. Hence, the 2005 net farm income is projected to be below the previous five-year average income. Average income in 2005 is lower than the 2003 and 2004 incomes but is higher than the 2001 and 2002 incomes."
The study utilized yield projections from the Illinois Agricultural Statistic Service.