Economists and central bankers have lots of theories these days about whether global commodities prices will continue to fall.
For American farmer's, the drop in a wide range of agricultural prices is very real.
Weaker demand from a slowing economy has put downward pressure on the global price of a wide range of farm products. Now, those weak food prices are starting to take a bite out of U.S. farm income.
Last week, the Department of Agriculture predicted that farm incomes will drop to less than half the peak reached two years ago. The USDA projected farm incomes this year will come in at less than $59 billion, down 36 percent from last year and 53 percent from a record high of $123.7 billion two years ago.
If those forecasts are correct, the drop would push farm incomes to the lowest level since 2002, after adjusting for inflation.
News of a sharp economic slowdown in China—one of the world's biggest buyers of U.S. farm products—has recently sent many commodity prices tumbling. The decline will likely reverse a steady rise in overall farm income.
"The bigger picture for many agriculturals is that falling prices can largely be seen as a continuation of a general downward trend over the past few years as large global supplies weigh on prices," Capital Economics commodity analysts said in a recent note to clients.
The economic fallout from the drop in farm income will hit some parts of the country much harder than others.