Agricultural News
FAPRI Report On Profitability Issued
Tue, 09 Mar 2010 17:45:13 CST
The livestock sector can lead the agricultural economy to higher net farm income, assuming the farm economy benefits from a recovering general U.S. economy. That analysis tops a 2010 baseline report prepared by the University of Missouri Food and Agricultural Policy Research Institute and delivered to the U.S. Congress. The 10-year baseline shows economic possibilities for livestock, crops and biofuels under certain assumptions.
The report projects net farm income increases for the next two years largely because of stronger livestock prices. However, the program’s co-director Pat Westhoff says 2010 farm income will recover only a third of the ground lost in 2009. Net farm income fell by more than 30-billion dollars in 2009, as sharp declines in cash receipts were not offset by modest drops in production costs.
The FAPRI baseline shows crop prices remain near the 2009 level in 2010 and 2011. Corn producers can see strong returns per acre until the end of the 10-year baseline. Soybean returns must remain well above pre-2007 levels for soybeans to stay competitive with corn.
On the livestock side, the all-milk price is expected to increase by more than 4-dollars per hundredweight in 2010. Pork producers are expected to approach breakeven profits. And beef demand should strengthen market possibilities.
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