09/11/08 The Increasing Net Farm Income

The Increasing Net Farm Income. I'm Greg Martin with today's Line On Agriculture. Overall net farm income in Oregon has never been higher. But expenses for producers continue to rise and are keeping many farmers and ranchers from fully enjoying a healthy profit margin. The latest economic snapshot shows that farmers and ranchers did quite well last year, according to Brent Searle, analyst with the Oregon Department of Agriculture. SEARLE: We're close to 1.5 billion in net farm income in 2007- a 50 percent increase from the previous year. That is a record high. That's significant. It's triple the farm income of what we've seen just a few years ago. The increase in net farm income is the result of some record high prices paid for Oregon crops and livestock last year. The number, however, is an average. For some producers, expenses continue to weigh heavily. SEARLE: Oregon agriculture is so diverse that the profits or net profit from farming is distributed all across the state in different ways depending on what the crop or livestock is. It's not uniform. Some are doing well, some aren't. Expenses are still rising, but not as high as the actual prices for agricultural inputs such as fuel, fertilizer, and pesticides. It appears producers are doing a good job of managing expenses- cutting back on what they use whenever possible. The end result is that value of production has outgained rising expenses, producing a better bottom line for many Oregon farmers and ranchers. Searle says the big increase in net farm income last year in Oregon is a result of the prices paid for what farmers and ranchers produced: SEARLE: We're seeing those higher prices now and that's largely what is responsible for the higher income- higher demand for those products worldwide. Searle says farm expenses are also up more than three percent, but that's not nearly as high as the increase cost of such things as equipment, fuel, fertilizers, and pesticides. There's a good reason for that. SEARLE: With those high prices, farmers are simply using less. They are managing through better monitoring, through conservation, through better equipment and other things so that their overall costs are higher, but not as high as the price increases would suggest. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.