Net Farm Income Forecasted To Decline in 2012
U.S. net farm income is forecast to decline almost $4 billion from its all-time high in 2011. Net cash income is expected to decline almost $2 billion.
Value of agricultural sector production is expected to increase with gains anticipated for crops, livestock, and especially revenues from services and forestry sales. Larger gains are predicted for oil crops and other farm income.
Solid gains in the projected annual value of U.S. agricultural production will be more than offset by increases in purchased inputs and payments to stakeholders. In particular, feed expenses are forecast to increase almost $10 billion in 2012.
Farm equity is projected to achieve a new record high in 2012 as expected growth in farm assets exceeds the expected increase in farm debt. Debt repayment capacity utilization (DRCU)--a measure of farm exposure to financial risk--is forecast to tick upward while remaining at a near-historic low level.
Increases in Farm Expenditures Outpace Increases in Receipts in 2012
Net farm income is forecast to be $114 billion in 2012, down 3.3 percent from 2011. Net cash income PDF icon (16x16)is forecast at $132.8 billion, down 1.4 percent from 2011. Despite gains in almost all sources of farm income, large increases in farm expenditures, especially for purchased feed, have more than wiped out those price-led gains to farm income. Nevertheless, after adjusting for inflation, both income measures are high by historical standards
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