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Net farm income forecast to increase 6 percent in 2013
Story Date: 8/28/2013
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Source: USDA ECONOMIC RESEARCH SERVICE, 8/27/13
Net farm income is forecast to be $120.6 billion in 2013, up 6 percent from 2012’s estimate of $113.8 billion. After adjusting for inflation, 2013’s net farm income is expected to be the second highest since 1973. Net cash income is forecast at $120.8 billion, down 10 percent from 2012.
Not all crops produced in 2013 will be sold by the end of the 2013 calendar year; we anticipate substantial increases in the annual quantity and value of crop inventories, particularly for corn. As a result, crop cash receipts are expected to decline 5.5 percent in 2013. The projected increase in livestock receipts (4.9 percent) is not sufficient to offset increasing expenses. Nevertheless, after adjusting for inflation, net cash income is expected to remain high by historical standards.
Highlights
Net farm income is forecast to increase 6 percent, to $120.6 billion in 2013, due largely to expectations of record crop production. This would be the second highest inflation-adjusted amount since 1973, with only 2011’s inflation-adjusted income being higher.
Net cash income is forecast to decline by more than 10 percent from 2012. Unlike net farm income, net cash income does not account for capital consumption, change in inventories, and nonmoney income.
Substantial year-end crop inventories buoying the 2013 net farm income forecast are not reflected in net cash income.
The value of livestock production is expected to increase 5.2 percent in 2013, with receipts increasing nearly 4.9 percent. The projected gains result mostly from expectations of higher prices.
Crop receipts are forecast to decline by $12.4 billion (5.5 percent) in 2013, which would be the first decline since 2009. Nonetheless, the value of crop production is expected to rise 2.7 percent in 2013, with increases boosting anticipated year-end crop inventories.
At $354.2 billion, total expenses are projected to increase $13.1 billion in 2013, continuing a string of large year-to-year increases since 2010. In both nominal and inflation-adjusted dollars, 2013 production expenses are expected to be the highest on record.Increases in farm asset values are expected to continue to exceed increases in farm debt, leading to expectations of another new record high for farm equity.
Farm financial risk indicators are expected to continue at historically low levels.
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