Washington (AFP) - A majority of US farmers and ranchers expect flat or lower profits and declining investment in 2020 despite much-touted new US trade agreements, according to a survey released Wednesday.
While farmers are "cautiously optimistic" that the US-China trade agreement and a new North American trade agreement with Mexico and Canada will lift exports, "they are reluctant to make significant investments in buildings, machinery or equipment," said the American Farm Bureau Federation.
More than 86 percent plan to "keep their capital investments to a minimum in 2020," according to a survey of about 300 people conducted by the farm advocacy organization.
The caution reflects in part the impact of higher operating costs, which have risen by 16 percent over the last decade.
US farm incomes are projected to rise 3.3 percent this year to $96.7 billion, due in part to government subsidies, according to the latest forecast by the US Department of Agriculture.
Median farm household income grew an estimated 5.6 percent between 2018 and 2019 to $76,810 after declining between 2015 and 2018, the USDA said.
For 2020, median income is projected to decline 0.3 percent, according to the government.
Almost 50 percent of those in the survey expect commodity prices to remain at the same levels in 2020, with fewer than 25 percent expecting an increase.
But survey participants were more optimistic about the medium term, with more than 45 percent expecting higher prices over the next five years.
Under the "phase one" trade deal with the US, China promised to boost spending on US farm goods by $32 billion over the next two years.