Net Farm Income Forecast To Increase 15 Percent in 2013
Net farm income is forecast to be $131 billion in 2013, up 15.1 percent from 2012’s estimate of $113.8 billion. After adjusting for inflation, 2013’s net farm income is expected to be the highest since 1973. Substantial year-end crop inventories are expected as a result of the record corn harvest Net cash income—which measures the difference between cash expenses and the combination of commodities sold during the calendar year plus other sources of farm income—is forecast at $129.7 billion, down just over 3 percent from 2012. Even so, 2013’s forecast would be the fourth time net cash income, after adjusting for inflation, has exceeded $100 billion since 1973.
The projected $10.9-billion increase in total expenses in 2013, to $352 billion, continues a string of year-to-year increases (except for 2009) that have taken place since 2002. In both nominal and inflation-adjusted dollars, 2013 production expenses are expected to be the highest on record. Labor and rent are the expense items expected to increase the most in 2013, while producers are expected to pay less for fuel and fertilizer.
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. Confirming the strength of the farm sector's solvency, both the debt-to-asset ratio and debt-to-equity ratio are expected to reach historic lows.
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Median Farm Household Income Expected To Be Largely Unchanged in 2013
Projected median total farm household income is expected to remain essentially unchanged in 2013, at $68,414. Given the broad USDA definition of a farm, many farms are not profitable even in the best farm income years. With sectorwide net cash farm income forecast to decline in 2013, median farm income is expected to decline to -$2,000 (down from -$1,453 in 2012). Most farm households earn all of their income from off-farm sources—median off-farm income is projected to increase by 2.9 percent in 2013, to $60,437. (Note: Because they are based on unique distributions, median total income will generally not equal the sum of median off-farm and median farm income.)
Get the 2013 forecast for farm household income.
- Agricultural Income and Finance Outlook for historical estimates and forecasts of farm sector financial information that allow readers to gauge the longer-term financial health of the Nation's farmers and ranchers