A report by University of Missouri agricultural economists show despite a drought, net farm income is still strong.
By Duane Dailey, University of Missouri
Despite drought, Missouri net farm income could reach almost $2.8 billion for 2012. That ranks above the average for 2004 to 2011, but below 2011, which hit a record-breaking $3.33 billion.
While outlooks are for low crop yields, commodity prices went up in face of short supply. Higher prices are expected to propel net farm income to $4 billion in 2013.
"Sharply higher prices help offset a much smaller crop," says agricultural economist Scott Brown, coauthor with Daniel Madison of "Missouri Farm Income Outlook 2012."
The economists used yields from the USDA September Crop Production Report. Missouri yields are down more than U.S. yields.
While harvest isn’t over, Missouri corn yields are expected to be the lowest since 1999. Soybeans yields are the smallest since 1995.
Corn prices in the 2012-13 market year are estimated to top $8 per bushel, up from near $6.50 for 2011. Soybean prices are estimated at $16 per bushel for 2012-13, up from $12.45 last year.
Wheat, a fall-planted crop, missed most drought damage. Yields were the highest since 2003, bringing the best cash receipts since 1989.
Crop receipts for 2012 are projected at $5.5 billion out of Missouri farm receipts total of $9.95 billion.
"Drought impact on livestock producers will bring more harm—and last longer," Brown says. "Many beef and dairy producers will liquidate part of their inventory to combat high feed prices.
"Some will sell animals to get through the winter," he says. "There is simply not enough hay to feed them."