USDA Forecasts Net Farm Income at $94.7 Billion


USDA expects net farm income to be $94.7 billion in 2011, up $15.7 billion, or 19.8 percent, from the 2010 forecast, despite a $20-billion jump in production expenses.

Agriculture Secretary Tom Vilsack said the report is good news for producers and indicates that economic improvement is underway in much of rural America. “Potential record or near record prices for commodities like corn, wheat, soybeans and cotton reflect the fact that our trading partners continue a strong demand for food and fiber produced by America’s farmers,” Vilsack said.

The 2011 forecast, updated Monday, is the second highest inflation-adjusted value for net farm income recorded in the past 35 years. Cash receipts are expected to increase 9.1 percent, with cotton, soybean, wheat, and corn receipts showing the largest gains.

Production Expenses Jump in 2011

After falling $12.0 (4.1 percent) billion in 2009 and rebounding a relatively modest $6.5 billion (2.3 percent) in 2010, total production expenses are set to jump $20.2 billion (7.0 percent) in 2011 to a nominal record $307.5 billion. The 2011 jump resembles the large increases in production expenses in 2007 and 2008. This is the first time that expenses will have exceeded $300 billion. Despite crossing this threshold, 2011 inflation-adjusted expenses still remain below the levels reached in 1979 and 1980.

 

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