USDA's Economic Research Service today forecast net farm income at $131 billion in 2013, which would be up 15.1% from $113.8 billion in 2012 and the highest since 1973, when the figure is adjusted for inflation. This estimate represents a $10.4-billion increase since its August forecast.
Net cash income, which measures the difference between cash expenses and the combination of commodities sold during the calendar year plus other sources of farm income, is forecast at $129.7 billion. This would be a 3% decline from 2012, but the figure would still be the fourth time net cash income (after adjusting for inflation) has exceeded $100 billion since 1973. This forecast for net cash income is up $8.9 billion from August.
ERS projects a $10.9 billion increase in total expenses in 2013, to $352 billion, which continues a string of year-to-year increases (except for 2009) that have taken place since 2002. "In both nominal and inflation-adjusted dollars, 2013 production expenses are expected to be the highest on record. Labor and rent are the expense items expected to increase the most in 2013, while producers are expected to pay less for fuel and fertilizer," ERS details.
According to ERS, farm sector assets, debt and equity are all expected to increase in 2013. "As in the last several years, increases in farm asset value are expected to exceed increases in farm debt, with farm real estate the main driving force," ERS explains. Confirming the strength of the farm sector's solvency, both the debt-to-asset ratio and debt-to-equity ratio are expected to reach historic lows, ERS reports.
Get more details about the 2013 forecast for farm sector income.