USDA: 2010 net farm income forecast up 12%

The 2010 forecast is $1.4 billion below the average of $64.5 billion in net farm income earned in the previous ten years. Still, the $63 billion forecast for 2010 remains the fifth largest amount of income earned in US farming.

 

In 2009, crop prices continued to decline and prices for livestock animals and products plummeted. With economic conditions deteriorating worldwide, demand for exports tailed off, with few options available to expand marketing elsewhere.

 

Sharply declining demand in 2009 forced farmers to accept prices that were lower than expected when production plans were made.

 

In 2010, the economic conditions for livestock producers are expected to improve, while the economic conditions for crop producers are expected to deteriorate slightly or stabilize.

 

Protein foods produced from animals and animal products are higher cost items, and subject to budgeting considerations. Amid a recession, consumers can reduce consumption of meat, milk, and eggs, or buy lower priced products.

 

The demand for US soybeans was one of the brighter spots for the farm sector in 2009, as demand for US supplies remained strong due to the continued strength of Chinese purchases.

 

But reports of higher Brazilian production could put downward pressure on prices in 2010 as the South American harvest progresses.

 

The largest decline in calendar-year 2010 crop receipts is expected for wheat, reflecting USDA’s anticipation of both falling prices and quantities sold.

 

Quantities of US wheat available for sale in 2010 are forecast to decline 9.7%, while quantities sold are expected to decline over 16% from calendar-year 2009.

 

Total use for wheat in the 2009/10 marketing year (June 2009 – May 2010) is down from the previous year because of both lower domestic seed use and lower exports, due to strong competition from foreign exporters.

 

 

Soybean receipts are expected to experience the second largest decline ($1.8 billion) in 2010, reflecting an expected price decline (58 cents per bushel) with very little change expected in quantity sold (less than 0.2% decline).

 

The soybean meal price in 2010 is expected to fall almost $69 per (short) ton. Soybean crush, exports, and seed, feed, and residual use are all expected to increase during the 2009/10 marketing year (September 2009 – August 2010).

 

Exports of soybean oil for 2009/10 are off to an excellent start, with demand boosted by an uncommon price discount for US soybean oil relative to South American supplies.

 

 

Sales of corn for grain—the largest single source of crop cash receipts for US farmers—is expected to decline slightly in 2010.

 

Domestic demand for corn in 2009/10 (September 2009 – August 2010) is expected to increase for food, seed, and industrial use as well as feed and residual use.

 

Exports of US corn grain in 2009/10 are expected to rise despite increased foreign competition and a delayed US harvest in 2009.

 

For a complete overview of the estimates, get the forecast for farm sector income.