Farm income is booming, with crop farms – led by corn – and cattle and hog operations enjoying huge gains while poultry farms are seeing lower pay due to the lagging wholesale price of broilers, according to a report by USDA’s Economic Research Service.
Net farm income in the United States is expected to top $100 billion in 2011, up 28 percent from 2010 and 50 percent higher than the 10-year average for 2001-2010, the report said.
The U.S. annual corn price is expected to increase from $3.89 per bushel to $6.04, a large increase over its earlier high of $4.66 in 2008, as corn continues to respond to the increased demand for ethanol. Federal law requires the fuel industry to utilize a fixed amount of ethanol every year, with corn-based ethanol topping out at 15 billion gallons in 2015. Farms specializing in raising corn are expected to enjoy a 19 percent increase in net cash income in 2011, highest among crop farms.
Other program crops, including wheat, hay and cotton, are also registering very large gains in annual receipts in 2011. Wheat is expected to hit $7.43 per bushel, a 44 percent increase from 2010 and 8 cents-per-bushel below its 2008 average, reflecting a large increase in wheat exports, the report said.
Cattle and hog farms are also having a banner year, while poultry farms are lagging. Farms specializing in cattle should see a 21 percent increase in income in 2011 over 2010, while hog farms should average an 18 percent increase.
With wholesale prices for most broiler products projected to be below 2010 levels, poultry farms businesses’ average net cash income is forecast to decline 18 percent in 2011, in sharp contrast with other livestock farm. Poultry companies site that the high cost of corn has forced them to slow production.
Government payments make up a significant share of farm income, about 10 percent, the report said. While government payments based on crop prices are expected virtually to disappear in 2011, other payments — such as conservation easements — are expected to total $10.6 billion in 2011.
Source: meatingplace.com/industry news, 12/19/11