Feb 13 - Net farm income is forecast to be $128.2 billion in 2013, up nearly 14 percent from 2012's revised forecast of $112.8 billion, according to the U.S. Department of Agriculture. After adjusting for inflation, the USDA expects 2013's net farm income to be the highest since 1973. Net cash income is forecast at $123.5 billion, down almost 9 percent from 2012.
Not all crops produced in 2013 will be sold by the end of the 2013 calendar year; the USDA anticipates substantial increases in the annual quantity and value of crop inventories, particularly for corn. As a result, crop cash receipts are expected to decline in 2013. The small projected increase in livestock receipts is not sufficient to offset increasing expenses. Nevertheless, after adjusting for inflation, net cash income is expected to remain high by historical standards.
Highlights from the USDA’s report include:
Agriculture Secretary Tom Vilsack issued the following statement about the 2013 farm income forecast:
"Today's forecast for the strongest net farm income in four decades is another positive testament to the resilience and productivity of U.S. farmers and ranchers. American agriculture continues to endure an historic drought with tremendous resolve, and last year was an important reminder of the need for a strong safety net. The commitment of American producers to embrace innovation and adapt to new challenges has helped fuel growth for American agriculture over the past five years. I am also heartened that our farmers' keen business sense is continuing the recent trend of strong farm finances, with farm equity set to reach another record high in 2013.”
Observers commenting to Bloomberg News were less sanguine. “You’re going to see production go up but prices go down,” said Chris Hurt, professor of agricultural economics at Purdue University. “There is a lot of optimism right now and I don’t know that the optimism is justified given how low prices could go.”
Assuming normal weather, one would have to think that revenue levels for 2013 will be down from 2012 when the drought pushed prices higher and farmers qualified for record insurance payments, Bloomberg was told by Pat Westhoff, director of the Food and Agricultural Policy research Institute at the University of Missouri. “How much that will affect individual producers will depend on their own individual circumstances,” according to Westhoff.
Click here for the full report.