According to the Department of Agriculture, all measures of farm sector earnings are forecast to rise more than 20 percent in 2011. For the first time on record, net farm income and net cash income are both projected to exceed $100 billion.
Due to higher crop and livestock prices, the nation’s farm income is expected to jump 31 percent this year to a record $103.6 billion. That’s an increase over USDA’s February forecast of $97.3 billion which was nearly 20 percent over last year’s total.
USDA predicts receipts from farm commodities will jump 18 percent over 2010 levels. Stripped out, crop values are expected to rise 19 percent and hit $206.5 billion while livestock sales are expected to increase 16 percent to a total of $163.8 billion.
Government officials say rising farm incomes, which increase land values and encourage the purchase of seeds, fertilizer and equipment, have been driven by greater demand for exports and biofuels.
The increase also is powered by USDA’s expectation of bumper crops corn and soybeans. While the next official government prediction is due later this month some private estimates are already out.
The Pro Farmer Crop Tour pegged 2011 U.S. corn production at 12.5 billion bushels, on an average yield of 147.9 bushels per acre. The private analysis firm also estimates soybean production will surpass 3 billion bushels with an average yield of 41.8 bushels per acre.
Analysts at FCStone are a bit more optimistic, calling for the U.S. corn harvest to reach 13 billion bushels as farmers bring in 3.15 billion bushels of soybeans.
According to the official August crop estimates, U.S. corn yields will be an average of 153 bushels per acre with total production hitting 12.9 billion bushels. If realized, that would be the third largest crop on record.
The Agriculture Department also predicts the U.S. soybean crop to yield an average of 41.4 bushels per acre and put a little more than 3 billion bushels of beans into the bin.
Lower export numbers and private estimates of a smaller crop failed to bring out the bulls as grain prices trended lower.
For the week, December wheat lost 21 cents, while the December corn contract declined by 7 cents.
Dry August weather helped soybeans move higher even as traders determined last year’s South American crop would help fill the pipeline. For the week, the November contract rose 23 cents. December meal prices also posted a gain moving more than $3.89 per ton higher.
In the softs, cotton almost gained back what it lost last week as the December contract settled Friday with a weekly gain of nearly $1.60 per hundredweight.
In the dairy market, Class III Milk futures increased its earnings over last week as both the September and October contracts moved 44 cents higher.
Over in livestock, the October cattle contract lost 40 cents. Nearby feeders followed suit losing more than 30 cents. And the October lean hog contract fell $1.30.
In the currency markets, the Euro lost 296 basis points against the dollar. Crude oil advanced 95 cents per barrel. Comex Gold traded in record territory, again, this week gaining $45 per ounce.
And the Goldman Sachs Commodity Index was relatively flat gaining almost 4 points to close at 662.50.