U.S. net farm income is forecast to decline almost $4 billion from its all-time high in 2011. And net cash income is expected to decline almost $2 billion, according to the USDA’s 2012 Farm Income Forecast. The 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, according to the USDA. 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 – a measure of farm exposure to financial risk – is forecast to tick upward while remaining at a near-historic low level. PD
—Information from the USDA
