(Bloomberg) -- U.S. farm profit in 2020 will rise to a seven-year high after government-aid payments doubled amid the coronavirus pandemic and trade disputes, the Department of Agriculture said.
President Donald Trump regularly promoted his farm-aid initiatives as he appealed to his rural political base. He announced a second round of coronavirus relief for farmers at a campaign rally in the battleground state of Wisconsin seven weeks before the election.
U.S. net farm income this year will jump 43% to $119.6 billion, the highest inflation-adjusted level since 2013, the government said Wednesday in a report. The projected surge occurred as the virus pandemic roiled the food-supply chain in the spring, driving grain prices down and meat costs higher.
The latest data show the increasing dependence of growers on government assistance after three years of trade and Covid-19 aid on top of traditional subsidies. Farmers face a murky outlook next year if the Biden administration adjust payments.
Direct government aid, accounting for 39% of net farm income, rose to a record $46.5 billion from $22.4 billion last year.
The forecast by the USDA's Economic Research Service marked a $16.9 billion boost in net income from a September projection. Commodity prices rallied, and aid rose $9.3 billion following a second round of coronavirus relief.
U.S. agriculture is on track for one of the three most-profitable years in a half century. Adjusted for inflation since 1973, projected net farm income in 2020 will be surpassed only by 2011 and 2013 figures.
©2020 Bloomberg L.P.
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