While global financial markets have yo-yoed their way through the past year, farm receipts have been on a steady rise into record territory.
USDA officials are forecasting net farm income to rise 28 percent in 2011. For the first time ever, U.S. farmers are projected to bring in nearly $101 billion. The number is down 3 percent from the government’s most recent estimate but still on pace with last year’s record increase. And for the first time in history, U.S. crop sales are predicted to exceed $200 billion. Livestock producers also are expected to enjoy increased revenue as sales are estimated to hit $165 billion.
Chasing increased profits, however, are the inevitable increases in the cost of doing business. Total production expenses are forecast to jump nearly 12 percent this year reaching nearly $320 billion. According to USDA officials the higher amount is being driven by increased prices for inputs.
But even as farm income goes through the roof, agricultural exports are expected to decrease this year. USDA officials forecast U.S. exports will fall 4 percent below 2011 levels and settle at $132 billion.
Declining corn exports account for more than a third of the loss. Despite increased demand in key U.S. markets such as China, Mexico, and South Korea, stronger competition from Argentina and Ukraine is predicted to restrict U.S. exports.
On the other side of the coin, U.S. agricultural imports are expected to increase nearly 12 percent to $105.5 billion. Much of the spike is due to rising domestic demand for tropical goods like vegetable oils, coffee and rubber.
And with imports rising more than twice as fast as exports, USDA prognosticates America’s long standing agricultural trade surplus will decline nearly 40 percent next year to $26.5 billion.