One bright spot in the economy – farming
Source: Des Moines Register
Farming is turning out to be one of the few bright spots in the economy. The Agriculture Department says that net farm income will rise 24 percent this year, thanks to higher returns for livestock producers and in row crops such as soybeans and cotton.
The department also is raising its estimates of U.S. farm exports due to strong demand for U.S grain and feed fueled by the drought in Russia and neighboring countries that are major producers of wheat.
Net U.S. farm income is expected to hit $771 billion this year, which is $12.3 billion above the average for the last 10 years. Last year was tougher on farm earnings d because of the global recession.
“These are good numbers. These are strong numbers,” Agriculture Secretary Tom Vilsack said.
Livestock producers, led by dairy farms and the pork sector, are leading the rebound this year. Cash receipts on milk are expected to be up 26 percent over 2009, and income on pork will rise by 25 percent due to a cut in production and rising demand domestically and oversees. Cash receipts for cattle and calves are expected to increase by 11 percent.
Corn sales are expected to fall this year, because of a bumper crop that is likely to set new records for yield and total bushels, while soybean receipts should rise nearly 9 percent, thanks in part to surging exports. The USDA says demand may actually overtake production in the end of this year if the federal biofuels mandate in 2011 leads to a “strong recovery” for the biodiesel industry.
Farm exports are forecast to hit $113 billion for fiscal 2011, which starts Oct. 10. That $5.5 billion over the revised forecast for fiscal 2010. Imports are also rising, but the USDA expects the country to have a net balance in agricultural trade in fiscal 2011 of $31.5 billion. Compare that to 2006, when exports exceeded imports by just $4.6 billion.
“Increased ag exports, especially of grains and meat, are going to help drive this rebound, and not only will they create better income opportunities for our producers, but also they’ll create more off-farm job opportunities,” Vilsack said.
Every $2 billion of ag export supports 8,000 to 9,000 jobs and generates an additional $1.4 billion in economic activity, he said.
