2011 Farm Sector Income Forecast up 31%
Net Farm Income Forecast Up 31 Percent in 2011
Net farm income is forecast at $103.6 billion for 2011, up $24.5 billion for a rise of 31 percent from 2010. Net farm income reflects income from production in the current year, whether or not sold within the calendar year, and is a measure of the increase in wealth from production. The 2011 forecast of net farm income is the highest inflation-adjusted value recorded since 1974.
Net cash income, at $114.8 billion, is forecast up $22.5 billion (24.4 percent) from 2010, and $39.1 billion above its 10-year average (2001-2010). Net cash income reflects only the cash transactions occurring within the calendar year and is a measure of solvency, or the ability to pay bills and make payments on debt.
Net value added is expected to increase by $27.1 billion in 2011 to $157 billion .
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Highlights
*All three measures of farm sector earnings (net farm income, net cash income, and net value added) are forecast to rise more than 20 percent in 2011.
- Net farm income and net cash income are both projected to exceed $100 billion for the first time in 2011.
- Net farm income is forecast to rise 31 percent in 2011 after increasing 28 percent in 2010.
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The forecast is for a rise of 17.8 percent in cash receipts from sales of farm commodities.
- Crop receipts are expected to increase $33.6 billion, with corn, wheat, hay, cotton, and soybeans receipts expected to show the largest percentage gains.
- Livestock receipts are expected to increase $22.4 billion in 2011, led by rising cash receipts for dairy, meat animals, and turkeys.
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Total expenses are forecast to increase by $32.5 billion, exceeding $300 billion for the first time.
- Total production expenses in 2011 are forecast to be 11.4 percent higher than in 2010, following an estimated 2.2-percent increase in 2010.
* Government payments are forecast to be $10.2 billion in 2011, a 17.7-percent decrease from 2010.
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Double-Digit Increases in Crop and Livestock Cash Receipts Expected in 2011
Crop receipts are expected to rise over 19 percent in 2011 as large increases are expected across a number of crop categories. Livestock receipts are expected to rise nearly 16 percent, led by strong sales of dairy, meat animals, and turkeys. Many different crop and livestock categories are expected to achieve record high sales.
Food grain cash receipts are expected to increase almost 25 percent in 2011 while remaining below their 2008 high. Wheat sales, which are expected to account for 86 percent of 2011 food grain receipts, are forecast to increase almost 37 percent. The price of wheat is expected to jump $2.35 per bushel as the quantity of wheat sold is expected to decline over 5 percent in 2011. Total U.S. wheat use is expected to decline in marketing year 2011 as higher domestic use is more than offset by declining wheat exports. U.S. wheat exports are being hurt by large foreign production and lower world prices. Rice receipts, unlike receipts for most major U.S. crops, are expected to decline almost 20 percent in 2011 due to lower sales and prices.
Feed crop receipts are expected to increase almost 37 percent, achieving a record level in 2011. Sales of corn for grain, which are expected to account for almost 86 percent of 2011 feed crop receipts, are expected to increase over 38 percent in 2011. While the quantity of corn sold in 2011 is expected to decline less than 5 percent, this will be more than offset by an almost $2-per-bushel increase in price. Corn exports are suffering as rising U.S. corn prices have made feed-quality wheat, a substitute, more competitive. Tight U.S. corn supplies, due largely to a drought in Southern-producing States, have hurt U.S. corn exports. Price increases are also expected in 2011 for barley, oats, and hay.
Receipts for oil crops are expected to achieve record highs in 2011 based on soybean receipts increasing over 17 percent. The soybean gains reflect a price increase of $2.76 per bushel, offsetting an anticipated 5.2-percent drop in quantity sold in 2011. Weather has played a role in lower 2011 production, although August rainfall will be the critical factor. Exports for marketing year 2011 are anticipated to be down compared to the previous 2 years as American producers face stiff South American competition for global buyers. Peanut sales in 2011 are expected to increase over 7 percent despite a decline in quantity sold, reflecting higher expected prices.
Source: US Dpt of Agriculture Economic Research Center
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