Wednesday, May 11, 2011

Net Farm Income Expected To Increase 20 Percent in 2011

Net value added, net farm income, and net cash income—the three key U.S. farm sector financial indicators—are expected to improve in 2011. Net farm income (a measure of profitability that accounts for inventories and capital consumption), is forecast to reach $94.7 billion in 2011, up nearly 20 percent from the 2010 forecast, and the second highest inflation-adjusted value for net farm income in the past 37 years. Over the past three decades, the top five years for nominal earnings have occurred since 2004, attesting to the profitability of farming in 2000-2009.

Net value added, USDA’s measure of agriculture’s contribution to the U.S. economy’s production of goods and services, is forecast to rise by $18.4 billion (14.2 percent). Net cash income (a measure of the ability to pay bills and make payments on debt) mimics these increases and is projected to increase $7.3 billion (8 percent).

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