Agricultural News
USDA Farm Income Forecast Confirms Producers' Resilience
Tue, 27 Nov 2012 16:53:44 CST
The USDA 2012 farm income forecast released by the Economic Research Service projects a net decline in overall farm income, but also shows an expected increase in the value of farm products and higher land values.
"Today's forecast is heartening," said Agriculture Secretary Tom Vilsack. "It confirms that American farmers and ranchers remained impressively resilient in 2012, even with tough odds due to one of the worst droughts in more than a generation. Thanks to its ability to remain competitive through thick and thin, U.S. agriculture is stronger today than at any time in our nation's history, supporting and creating good-paying American jobs for millions."
Net farm income is projected to drop almost $4 billion from its all-time high in 2011. Net cash income is expected to decline almost $2 billion. The value of agricultural sector production is expected to increase with gains anticipated for crops, livestock, and especially revenues from services and forestry sales. Larger gains are predicted for oil crops and other farm income.
"While down slightly from the August forecast, today's estimates for net farm income are the second-highest since the 1970s, while total farm household income is expected to rise. At the same time, the positive trend of falling debt ratios continue. The forecast suggests that strong farm income should remain a positive factor in carrying farmers and ranchers into the 2013 growing season," Vilsack said.
Solid gains in the projected annual value of U.S. agricultural production will be more than offset by increases in purchased inputs and payments to stakeholders. In particular, feed expenses are forecast to increase almost $10 billion in 2012.
Farm equity is projected to achieve a new record high in 2012 as expected growth in farm assets exceeds the expected increase in farm debt. Debt repayment capacity utilization (DRCU)--a measure of farm exposure to financial risk--is forecast to tick upward while remaining at a near-historic low level.
Median total farm household income increased by 5.3 percent in 2011, to $57,050, and is expected to increase another 1.0 percent in 2012, to $57,645. Most farm households, particularly those operating smaller farms, rely heavily on off-farm income--which is forecast to rise 3.4 percent in 2012. In contrast to the farm households that operate small farms, households associated with commercial farms derive more of their income from farming activities. Their median income from farming increased an estimated 7.9 percent in 2011 to $84,649, and their total household income also increased by 7.9 percent, to $127,009.
The report also shows government payments
"This year, the farm safety net showed its mettle and merit, helping to deliver peace of mind to thousands of farmers and ranchers dealing with losses caused by natural disasters. It's a reminder that Congress must do the same, and pass a comprehensive, multi-year Food, Farm and Jobs Bill that provides greater certainty for farmers and ranchers in the season ahead. Providing the tools and certainty they need is the least we can do for those who grow our food, fiber, feed and fuel, even through the most challenging of times," Vilsack said.
To access the full ERS 2012 Farm Income report, click here.
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