Preparing for a future with fewer ‘ad hoc’ payments
It is estimated that government payments will make up 36 percent of all net farm income in 2020, with a good portion of that coming from “ad hoc” payments such as MFP, CFAP and PPP, as well as state and regional programs .
Ag economist Brent Gloy says farmers should probably not count on that same level of federal support in 2021.
“There’s chances that that kind of stuff could continue but I think to see payments of this magnitude in the future is going to be a hard push,” he says.
While the uncertainty over federal assistance in 2021 makes it harder to plan for next year, Gloy advises farmers to think carefully about how they use this year’s payments.
“Make sure, in your operation, you’re using those funds strategically. Whether it be to build your liquidity and balance sheet or pay down debt or even make strategic investments, make good use of the funds we’re getting this year.”
Gloy spoke during a webinar hosted by Farm Credit Services of America.