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Summary:
According to USDA's Economic Research Service (ERS), national net farm income -- a key indicator of U.S. farm well-being -- is expected to rise to a record $95.7 billion in 2008, over 10% above the previous year's record ($86.8 billion) on the strength of higher commodity prices, which are being driven by the outlook for continued strong domestic and international demand and sharply lower stocks for major grains and oilseeds.1 Consequently, the outlook for the U.S. farm economy as a whole is for another year of record profitability as projected record agricultural cash receipts of $335.8 billion (up $51 billion or 18%) more than offset a $40.4 billion jump in production expenses to a record high of $294.8 billion. Government payments are projected up slightly in 2008 at $13.2 billion. An increase in ad hoc and emergency program payments are expected to more than offset declines in commodity program payments due to the projected rise in crop prices which, in turn, are expected to reduce price-triggered marketing loan benefits and counter-cyclical payments. Total farm asset value of $2,359 billion and total farm debt of $212 billion are both projected at record levels in 2008. However, the debt-to-asset ratio of 9.0% is down sharply from last year's value of 9.6% and represents the lowest level since 1960, suggesting a strong financial position for the agricultural sector as a whole. This report will be updated as events warrant.
