WASHINGTON, Aug. 30- The USDA Economic Research Service (ERS) released the Farm Income and Costs report today, which indicates that 2011 net farm income will increase more than 30 percent from 2010 while government payments will be decreased 17 percent.
The report states that all three measures of farm sector earnings, which include 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. Also, total expenses are forecast to increase by $32.5 billion, exceeding $300 billion for the first time.
ERS reports that the 2011 forecast of net farm income is the second highest inflation-adjusted value recorded since 1973. Net farm income is forecast at $103.6 billion for 2011, up $24.5 billion for a rise of 31 percent from 2010. Average net cash income for farm businesses is projected to be $83,100 in 2011, an almost 17 percent increase from the 2010 estimate of $71,100. Net value added is expected to increase by $27.1 billion in 2011 to $157 billion.
“With prices expected to approach record levels for major crops, a large part of the improvement in earnings for 2011 will be on the crops side,” according to the report. “Higher crop prices will cut into profit margins for the livestock sector that had just recovered from major losses suffered when feed costs started escalating in 2007.”
Crop receipts are expected to rise over 19 percent, or $33.6 billion, in 2011 with corn, wheat, hay, cotton, and soybeans receipts expected to show the largest percentage gains.
Livestock receipts are expected to rise nearly 16 percent, or $22.4 billion, in 2011 led by strong sales of dairy, meat animals and turkeys.
Government payments are forecast to be $10.2 billion in 2011, a 17.7-percent decrease from 2010.
The full report can be found here http://www.ers.usda.gov/Briefing/FarmIncome/
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