2013 Net Farm Income To Increase 15%

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. 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; the USDA, Economic Research Service anticipates 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% 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.

Report 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.