Iowa Public Television


Farm Income to Climb in 2003

posted on June 20, 2003

Hello, I'm Mark Pearson. Flush from the glow of a summer rally, the nation's financial community is optimistic and hard at work sifting through statistical clues that might indicate economic recovery is in motion.

For example the labor department reports consumer inflation is non-existent. Mortgage rates, already at forty year lows, may be ratcheted downward further when the Federal Reserve meets next week. That action could propel new home construction into hyper-activity. That sector of the economy has been booming for much of the year.

While employment continues to lag and many companies are still searching for profit, there is a sense in some sectors that things are improving. In Rural America the prospect of good crops coupled with market demand is refueling long depleted stores of optimism.


Farm Income to Climb in 2003

While the nation as a whole eagerly awaits the silver lining in the cloud commonly known as the U.S. economy, there are signs that economic recovery is well under way in rural America.

A number of factors are bolstering the optimism: abundant rainfall is easing drought conditions in much of the West and Midwest; commodity prices, which seemed to be stagnant for much of the past five years, are moving again; and, thanks to Uncle Sam, payments to farmers are scheduled to nearly double this year to more than $21 (B) billion.

Consequently, the Agriculture Department is predicting that net farm income will reach $46.2 (B) billion this year… an increase of more than 50% from 2002 â€Â" when net farm income fell to its lowest level since the farm crisis era of the 1980s.

But, the outlook isn’t rosy in every sector of agriculture. Dairy producers are weathering the lowest prices in more than 25 years. Corn prices, while up 15% in the past year, are still about half of what they were in 1996. U.S. wheat production is expected to rise by 35% this year, but last year’s crop was the smallest in three decades.

Still, with adequate moisture returning to key growing locations throughout the nation, America’s farmers and ranchers are cautiously optimistic that much of the rural economy is on the rebound.


Tags: agriculture farmers finance money news rural