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U.S. slashes forecast for 2015 farm incomes

CHICAGO — U.S. farm incomes will drop by more than half from their peak two years ago, according to U.S. Department of Agriculture estimates issued Aug. 25 that signal deeper pain for sellers of agricultural equipment and land.

USDA projected farm incomes this year will drop 36 percent from 2014 to $58.3 billion as a result of declining crop and livestock prices. The forecast is down 20 percent from USDA's February estimate of $73.6 billion.

If realized, the decline would bring farm incomes to their lowest level since 2002 when adjusted for inflation, according to the USDA. Income will be down about 53 percent from a record high of $123.7 billion in 2013, when crop supplies were tighter.

"The data confirms the deteriorating fundamentals in the farm economy," JP Morgan analyst Ann Duignan says.

Corn futures have lost about 30 percent on the Chicago Board of Trade in the past two years, after bumper harvests, while soybean futures are down about 37 percent.

Deere & Co., the largest maker of farm equipment, reported that third-quarter profit tumbled 40 percent on weak demand for agricultural equipment and gave a bleaker forecast for fourth-quarter sales.