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% to 114.8-billion dollars:
“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% from 2010 to 103.6-billion dollars. Cash receipts are estimated at 370-billion:
“That’s up 18% over 2010 levels, the crop receipts total about $207 billion, 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% higher than in 2010. He notes it’s the first time total expenses are expected to surpass the 300-billion dollar mark:
“Feed costs were 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 increases 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.