Net farm income is forecast to be $131.0 billion in 2013, up 15.1% 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, according to USDA’s Economic Research Service.

Net cash income is forecast at $129.7 billion, down 3.4% from 2012. Not all crops produced in 2013 will be sold by the end of the 2013 calendar year; ERS officials anticipate substantial increases in the annual quantity and value of crop inventories, particularly for corn.

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As a result, crop cash receipts are expected to decline by nearly 3% in 2013. The projected increase in livestock receipts (5.8%) 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% from 2012.
  • Net farm income is forecast to increase 15%, 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%) 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% in 2013, with receipts increasing almost 6%.
  • The value of crop production is expected to rise nearly 6% in 2013, although with large anticipated contributions to year-end inventories, crop receipts are expected to decline almost 3%.
  • 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.

Read the rest of the USDA economic forecast at http://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/highlights-from-the-2013-farm-income-forecast.aspx

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