Farm income to reach record $100.9B, according to USDA
WASHINGTON -- Farm income will jump 28 percent this year to a record $100.9 billion because of higher crop and livestock prices, the government said Tuesday.
The U.S. Department of Agriculture lowered its estimate from $103.6 billion forecast in August because of declines in grain and oilseed prices since Sept. 1, according to a report on its website. Income in 2010 totaled $79.1 billion. Sales of crops including corn, soybeans, wheat and cotton will rise 19 percent to $204 billion, and livestock receipts will jump by 17 percent to $164.1 billion, the USDA said.
Higher farm income and record land values that spur purchases of seeds, fertilizer and tractors have been driven by greater demand for exports and biofuels. The United States shipped a record $137.4 billion of farm goods overseas in the year ended Sept. 30, the USDA said earlier this month. Ethanol will consume a record 5 billion bushels, or 41 percent, of this year's corn crop, three times the total used five years ago, department data show.
"Across a broad swath of American agriculture, things are still good," Cargill Chief Executive Officer Greg Page said in an interview. "A voice of caution has been introduced to the almost unbridled optimism we had in July and August, but I think the outlook is still quite positive."
The Standard & Poor's GSCI Index of eight farm commodities has dropped 18 percent this year, as an escalating debt crisis in Europe dimmed prospects for the economy and farmers boosted output of crops including wheat and cotton. The gauge still is up 18 percent since the end of 2009, and this year's average is the highest ever.
Average corn, soybean and wheat prices this year are at least 24 percent higher than in 2010. Futures for the commodities have fallen at least 22 percent since Aug. 31 on concerns that economic growth is slowing. Cattle and hog futures traded in Chicago are up at least 16 percent in the past year.
Expenses such as diesel fuel and animal feed are projected to rise by 16 percent to $223.1 billion, the USDA said. Government subsidies will decrease by almost 15 percent to $10.6 billion, according to the report. The increase in farm income drove agricultural real estate prices to a record $2,350 an acre this year, the USDA said in a report in August. Farmland values in Midwest and Great Plains states were up at least 25 percent in the third quarter from a year earlier, the Federal Reserve banks in Chicago and Kansas City said earlier this month.
Cargill said Oct. 10 that its profits in the three months ended Aug. 31 fell 66 percent from a year earlier because of global economic uncertainty that created turbulence in commodity markets.
AP File Photo Farmer Nathan Weathers evaluates young corn stalks that will be used for feed corn and silage for nearby cattle feeders and an ethanol plant in Yuma, Colo., in this 2008 photograph.