USDA Forecast: Value of Crops Up

USDA released an updated forecast showing 2008 net farm income will reach $86.9 billion, little changed from the record $86.8 billion in 2007 but up 42% from the 10-year average of $61.1 billion. Net cash income, at $90.7 billion, is forecast to be $3.3 billion, or 4%, above 2007 and 33% above its 10-year average of $68 billion. Net cash income is projected to rise more than net farm income because of the carryover of 2007 crops, which are being sold in 2008.

The story for 2008 is twofold, however, with both large increases in the value of crop production and production costs. The value of crop production, at $181 billion, is forecast to exceed the 2007 record by $30 billion, or 20%. But, in a statement, Secretary of Agriculture Ed Schafer said producers' total expenses are expected to increase nearly 16% this year. Schafer also said crop supports have fallen from $11 billion to $810 million in three years.

The average share of farm household income from farm sources is forecast to be 7.3% in 2008, compared with 10% in 2007. Approximately, 70% of farm operator households have either an operator or spouse of an operator working at an off-farm job. Only for the households that operate the largest 8% of farms (sales more than $250,000) is average farm income greater than off-farm income in a typical year. ❖