U.S. Farmers Squeezed by Rising Costs as China Trade War Escalates

(Bloomberg) -- U.S. farmers face rising production costs as bumper harvests and a trade war with China erode cash from crop and livestock sales.

Total production expenses in 2018 will rise 4.2 percent to $369.1 billion from a year earlier, partly because of higher fuel and labor costs, the U.S. Department of Agriculture said Friday in a report. That marks the highest since 2014 . Net farm income is expected to drop for the fourth time in five years.

Cash receipts from commodity sales are expected to rise 0.7 percent to $374.9 billion even after including government aid in response to trade disruptions. Cash receipts from crops are used by companies including Deere & Co., the world’s largest farm-equipment maker, as an important indicator for demand.

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