USDA forecasts higher farm net income, expenses
USDA released its “2013 Farm Income Forecast” on Aug. 28. Drilling down into dairy, 2013 receipts from milk marketings are forecast at $39.8 billion, up $2.8 billion from last year and exceeding the previous high of $39.5 billion set in 2011. (See table on U.S. farm sector livestock cash receipts and value of production). USDA estimated an average milk price of $19.70/cwt. for 2013, up 6% from 2012 and second only to 2011’s $20.24/cwt. Milk production is expected to be about 1% above 2012 and 3% above 2011. (See U.S. annual average price for selected crops and livestock.) U.S. dairy producers are expected to receive $225 million in Milk Income Loss Contract (MILC) program payments in 2013, down 50% from 2012.
Looking at the overall report, net farm income is forecast to be $120.6 billion in 2013, up 6% from 2012. After adjusting for inflation, it is expected to be the second highest since 1973.
Net cash income is forecast at $120.8 billion, down just over 10% from 2012, but the fourth time it exceeded $100 billion since 1973 (after adjusting for inflation).
2013 will bring a $13.1-billion increase in total expenses, to $354.2 billion, continuing a string of large year-to-year movements since 2002. In both nominal and inflation-adjusted dollars, 2013 production expenses are expected to be the highest on record. Rent, labor and feed are the expense items expected to increase the most in 2013.
Farm sector assets, debt, and equity are all forecast to increase in 2013. As in the last several years, increases in farm asset value are expected to exceed increases in farm debt, with farm real estate the main driving force. Both the debt-to-asset ratio and debt-to-equity ratio are expected to reach historic lows.
Get the 2013 forecast for farm sector income.