U.S. Farm Income, Randy Schnepf, Specialist in Agricultural Policy, February 15, 2012
(forecast up 0.7%, from 2011s record level), coupled with continued strength in livestock markets (down 0.1% from 2011s record), are expected to be offset a 4% ($12.5 billion) increase in input costs to account for the lower forecast for overall net returns. The major drivers behind a second year of strong farm income projections are the outlook for near-record U.S. agricultural exports of $132 billion in 2012, following record exports in 2011 (projected at a record $136.3 billion), and continued strong crop prices driven in part by sustained demand from the U.S. corn ethanol industry. Market prices for major program crops for the 2011/12 marketing year have remained near record levels, and sustain a positive earnings outlook for most commodities, but especially for corn, cotton, and soybeans. Beef and broilers are expected to see record high prices in 2012 (up 9% and 7%, respectively), while egg and milk prices are projected to decline by over 8%. Government farm payments, although projected up 4% in 2012 at $11 billion, are expected to remain relatively small (second lowest total since 1997) as high commodity prices shut off payments under the price-contingent marketing loan and counter-cyclical payment programs.
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