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U.S. Farm Income for 2013 Projected at Record $120.6 Billion

August 28, 2013
Soybeans harvest
  
 
 

While record harvests for U.S. corn and soybeans will reduce 2013 farm income from a previous estimate, USDA still expects this year’s farm income to surpass 2011’s record.

Brian Wingfield

Record harvests for U.S. corn and soybeans will reduce 2013 farm income from a previous estimate as the bumper crops lower prices, the U.S. Agriculture Department said Tuesday.

While the agency projected less farm income than it forecast earlier this year, it still expects the figure to top the previous record of $118 billion in 2011.

Net farm income in 2013 will be $120.6 billion, down 5.9 percent from a February forecast of $128.2 billion. The new forecast is up 6 percent from a revised estimate of $113.8 billion for 2012, the USDA said in a report on its website.

The USDA figures released Tuesday tell a "very, very good story, and a very positive story for much of U.S. agriculture," Patrick Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri, said in a telephone interview.

"A bigger question is, what’s it going to look like a year from now?" Westhoff said. Projected prices for farm commodities are lower than they have been over the past two years, which could translate into lower revenue for farmers in two or three years, he said.

Farm Expenses

Total farm production expenses will increase 0.3 percent from the USDA’s February estimate to $354.2 billion, the highest level on record, in nominal and inflation-adjusted dollars. The agency said it expects rent, labor and feed prices to increase the most among farm expenses this year.

Among farmer costs, feed, the biggest spending component, is projected to increase 3.7 percent from last year to $61.3 billion. Fertilizers made by Potash Corp. of Saskatchewan Inc. and other companies will cost $28.2 billion this year, down 1 percent from last year, while seeds from Monsanto Co. and DuPont Co. are up 4.9 percent to $21.3 billion.

"It’s important to note that while income numbers are staying up at nice levels, production costs are continuing to climb and climb," Bob Young, chief economist for the American Farm Bureau Federation in Washington, said in a phone interview.

The value of crops sold to companies such as Cargill Inc. and Archer-Daniels-Midland Co. will be $211.1 billion, down 2.4 percent from the February estimate, the USDA said today. Revenue from livestock sales will increase 2 percent to $180.1 billion, the USDA said.

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RELATED TOPICS: Corn, Beef, Soybeans, Dairy, Crops, USDA, Harvest

 
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