According to the latest USDA Farm Income Forecast, 2008 will set a new record for net farm income.
"We're currently projecting for 2008 $96.6 billion," says USDA Chief Economist Joe Glauber. "That's up 10% from last year and last year was about 10% above the year before."
The main factor behind the record forecast according to Glauber is the rapid rise in grain and oilseed prices and above normal prices for most commodities. He says there are very few places where income might be lower, such as the livestock sector.
"Livestock prices have been high this year, however because of the rapid increase in grain prices feed costs are going up for livestock producers," Glauber says. "So you are beginning to see, at least in certain segments, a little more weakness than we might have seen last year."
Even with those pockets of lower income, Glauber says 2008 will be a record setting year in many areas such as crop production and forestry and service revenue. Another category that the forecast places high is asset value of farms and ranches.
"Even just over 2003, the increase in net farm equity has increased by $1 trillion," Glauber says. "It's just phenomenal growth."
According to Glauber, all the record setting income forecasts can be traced to higher commodity prices.
"You'd have to go back to the early 1970s when we saw grain markets take off," Glauber says. "We believe this is more sustained this time largely because of the biofuels sector and the rapid growth we've seen in that over the past five years."