Higher Grain Prices Mean Higher Income

Higher Grain Prices Mean Higher Income For Farmers

I’m KayDee Gilkey with the Northwest Farm and Ranch Report after this.

USDA Chief Economist Joe Glauber shares some of the highlights of the new USDA farm income forecast for 2012. 

Glauber: “Our current estimates are showing some very large numbers for net cash income and net farm income. For net cash income $139 billion and for net farm income is $122 billion both of these are up over 2011 levels. They essentially reflect the really strong cash receipts we are seeing on the crop side. For crops we are estimating that the receipts are about $122 billion for 2012, that is up 6.7 percent over 2011. Livestock receipts are down a bit at $166 billion, down a little, frankly about flat from where they were last year.”

There is a ying and yang relationship between crops and livestock -- high crop prices make for a stronger bottom line for crop farmers, however it means higher feed expenses for livestock producers.

Glauber: “Certainly expenses are up and they are largely lead by higher feed costs this year, so that is mainly a livestock issue. We have a little bit of increase on fuels, little bit of increase on fertilizer but the main increase coming on the feed side.”

Feed costs are predicted up for the whole year by 13 percent, however post-drought prices are up by far more -- at 30 to 40 percent higher.

I’m KayDee Gilkey with the Northwest Farm and Ranch Report on the Northwest Ag Information Network.