Neb. economic council foresees modest growth
LINCOLN, Neb. (AP) – Nebraska forecasters expect the state’s economic growth to trail the national pace over the next few years as income declines for Nebraska farmers, according to a report issued Jan. 21.
“As the agriculture sector normalizes after several years of high commodity prices, the Nebraska economy lacks a spark to match the growth of a recovering U.S. economy,” said Eric Thompson, an associate professor of economics at the University of Nebraska-Lincoln and director of UNL’s Bureau of Business Research, which publishes the semiannual report by the Nebraska Business Forecast Council.
The council report said the state’s farm income is expected to stabilize at about $5.1 billion this year – a drop of about 7.3 percent from last year and well below the record $7.5 billion in 2011.
Last year’s enormous national corn crop sent prices tumbling from more than $6 a bushel in 2012 to less than $5 in 2013. The report said the price drop cut income for most Nebraska farmers but also lowered costs for cattle ranchers and other livestock producers. The net result: a $500 million drop in overall Nebraska farm income.
The council predicted similar numbers for this year and expects the state’s ag sector to expand modestly in 2015 and 2016 as well.
The forecasters projected growth in nonfarm income to hit 4.1 percent in 2014, compared with 3.3 percent last year. The state’s nonfarm income is predicted to grow faster than inflation this year and in 2015 and 2016.
The state’s manufacturing sector should see steady, moderate growth through 2016, the report said, because of growing foreign demand for Nebraska food products. The strongest growth is forecast for this year, when the food processing industry is expected to add 1,000 jobs. But manufacturers that serve the state’s ag sector likely will experience a drop in sales.
The council expects a 1.1 percent total increase in Nebraska jobs for 2014.