What is in this article?:
• Net farm income has gone from about $55 billion in 2000 to what is predicted to be $100 billion this year, and most of this growth is due to high prices.
• Cash receipts for cattle and crops have shown an upward trend for the last four years, and that was due primarily to increased global demand, mostly from China and Southeast Asia.
Several factors will impact the future of U.S. agriculture in the next decade, but most current indicators point towards continued prosperity, says Daniel Whitley of the USDA Foreign Agricultural Service.
“We all have to agree, no matter which metric we choose to examine it, there is very good prosperity being enjoyed today in American agriculture,” said Whitley at this year’s Southern Peanut Growers Conference held in Panama City, Fla.
“Net farm income has gone from about $55 billion in 2000 to what we’re predicting to be $100 billion this year, and most of this growth is due to high prices.”
If you look at the 10-year average, we’re currently running about $20 billion above the 10-year average, he adds.
“Again, a lot of this is due to commodity prices. This is a judgment made about the profitability of ranchers and farmers — it has nothing to do with processors. That certainly is a record, but we fully expect that to continue into the future.”
Cash receipts for cattle and crops have shown an upward trend for the last four years, and that was due primarily to increased global demand, mostly from China and Southeast Asia, says Whitley.
The profitability and the profits being generated in agriculture show up in the primary asset of farmland, he says.
“USDA is predicting this year that the value of the farm sector in the United States is going to equal $2 trillion. Obviously, that is a record, and it’s largely due to the value of farmland increasing.
“But farmers also are great bookkeepers and have been paying down their debt. They also have more ownership in their machinery and in their operations,” says Whitley.
All of this is good, but the story gets even better, he says.
“The best news is that all this prosperity is not coming at the expense of the American taxpayer. This year, USDA expects farm payments to be zero for price-related payments. There will be payments made for conservation, direct payments and others, but right now, we predict there will be no payments related to prices. That makes for good news in Washington, D.C., and it makes for good news for rural Americans.”
Looking at projected baseline prices over the next decade, Whitley says USDA has predicted that soybean prices will remain high. They probably won’t be at the record levels of 2007 and 2008, but certainly higher than historical trends, he says.
“I would expect that when the next baseline is released, those prices will be even higher than we’re projecting for this year.”