Farm income forecast at highest level since 1973

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Farm income forecast at highest level since 1973The latest data from the U.S. Department of Agriculture’s Economic Research Service (ERS) projects net farm income for 2013 at $128.2 billion, expected to be the highest since 1973. The agency says a return to trend yields would lead to record crop production levels and result in substantial year-end crop inventories.  This would mean higher net farm income, since this measure goes beyond cash income to include the value of inventory change and other noncash items.

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 $123.5 billion, down almost 9 percent from 2012.  Even so the 2013 forecast would be the fourth time net cash income, after adjusting for inflation, has exceeded $100 billion since 1973, ERS says.

The projected $19.2-billion increase in total expenses in 2013 continues a string of large year-to-year movements since 2002, and expenses are forecast to establish a record-high. Rent, labor, and feed are the expense items expected to increase the most in 2013.

Farm sector assets, debt, and equity are all forecast 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.  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.

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