Net Farm Income Forecast

Net Farm Income Forecast. I’m Greg Martin with today’s Line On Agriculture.

The latest report from USDA’s Economic Research Service forecasts big increases in net farm income and net cash income for 2011. For the first time - both are expected to exceed 100-billion dollars in the same year. Both marks are records - with net cash income projected up just over 24-percent to 114.8-billion dollars.

GLAUBER: The net cash income number is a nominal record and it’s the highest level even adjusting for inflation all the way back to 1974.
 
That’s USDA Chief Economist Joe Glauber - who notes net farm income is forecast to rise 31-percent from 2010 to 103.6-billion dollars. Cash receipts are estimated at 370-billion.

GLAUBER: That’s up 18% over 2010 levels. The crop receipts are a total of about 207-billion dollars. That’s up 19.4% over last year, certainly led by sales of corn wheat and soybeans and livestock receipts are estimated around 164-billion and that’s up almost 16%.
 
Glauber says it’s likely no surprise that yearly farm expenses are also expected to reach new heights - forecast to be 11.4-percent higher than in 2010. He notes it’s the first time total expenses are expected to surpass the 300-billion dollar mark.

GLAUBER: Feed costs are up about 20%. That goes hand in hand with corn, wheat and soybean prices. And then fuel and fertilizer prices are up almost 24% so we’ve seen those increased in oil prices that translate into higher diesel prices, higher gasoline prices and also fertilizer prices.

Even so - Glauber says the balance sheet for 2011 looks good for ag producers. While expenses are up - he says receipts have increased more. Also - farm sector debt is down almost two-percent from last year and the debt to asset ratio is forecast to match a historical low.

That’s today’s Line On Agriculture. I’m Greg Martin on the Ag Information Network.