Source: USDA ECONOMIC RESEARCH SERVICE, 11/26/13

Net farm income is forecast to be $131.0 billion in 2013, up 15.1 percent from 2012’s estimate of $113.8 billion. After adjusting for inflation, 2013’s net farm income is expected to be the highest since 1973. Net cash income is forecast at $129.7 billion, down 3.4 percent from 2012 (see table on farm income indicators  ). 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 by nearly 3 percent in 2013. The projected increase in livestock receipts (5.8 percent) is not sufficient to offset increasing expenses and lower crop receipts. Nevertheless, after adjusting for inflation, net cash income is expected to remain high by historical standards.

Highlights
•      Net cash income is forecast to decline by more than 3 percent from 2012.
•      Net farm income is forecast to increase 15 percent, which would result in the highest inflation-adjusted amount since 1973. Unlike net cash income, net farm income includes change in inventories and other adjustments.
•      The projected $10.9-billion (3.2 percent) increase in total production expenses in 2013 continues a string of year-to-year increases (except for 2009) that have taken place since 2002.
•      The value of livestock production is expected to increase by 6 percent in 2013, with receipts increasing almost 6 percent.
•      The value of crop production is expected to rise nearly 6 percent in 2013, although with large anticipated contributions to year-end inventories, crop receipts are expected to decline almost 3 percent.
•      Increases in farm asset values are expected to continue to exceed increases in farm debt, leading to another new record high for farm equity.
•      Farm financial risk indicators are expected to continue at historically low levels.

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