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USDA Report: Net farm income forecasted to decline in 2012
Story Date: 11/27/2012
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Source: USDA ERS, 11/26/12
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.
Median Farm Household Income Up in 2011 and Forecast Higher in 2012
Median total farm household income increased by 5.3 percent in 2011, to $57,050, and is expected to increase another 1.0 percent in 2012, to $57,645. Most farm households, particularly those operating smaller farms, rely heavily on off-farm income--which is forecast to rise 3.4 percent in 2012. In contrast to the farm households that operate small farms, households associated with commercial farms derive more of their income from farming activities. Their median income from farming increased an estimated 7.9 percent in 2011 to $84,649, and their total household income also increased by 7.9 percent, to $127,009.
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