The latest report from USDA's Economic Research Service forecasts big increases in net farm income and net cash income for 2011. USDA Chief Economist Joe Glauber says that for the first time both are expected to exceed $100 billion in the same year. Both marks are records with net cash income projected up just over 24% to $114.8 billion.
"The net cash income number is a nominal record," Glauber said. "It's the highest level, even adjusting for inflation, all the way back to 1974."
Glauber notes that net farm income is forecast to rise 31% from 2010 to $103.6 billion. Cash receipts are estimated to be around $370 billion.
"That's up 18% over 2010 levels," Glauber said. "The crop receipts are a total of about $207 billion, that's up19.4% over last year, certainly lead by sales of corn, wheat and soybeans. Also livestock receipts are estimated around $164 billion and that is up almost 16%."
Glauber says it's likely no surprise that yearly farm expenses are also expected to reach new heights; they are 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 mark.
"Feed costs are up about 20% and that goes hand in hand with corn, wheat and soybean prices," Glauber said. "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 most agriculture producers. While production expenses are up, he says receipts have increased more. Also the farm sector debt is down almost 2% from last year and the debt to asset ratio is forecast to match a historical low.