While good crop yields will help boost your income for 2013, lower prices will keep them in storage.
As a result, USDA’s Economics Research Service (ERS) says farm cash income will be down some 3 percent from last year when there were more harvest time sales of grain than this year. Nationally, 2013 net farm income will be $131 billion, up 15 percent from 2012.
Net cash income for 2013 will be $129.7 billion, down 3.4 percent from last year. Since ERS expects delayed marketing, crop cash receipts will be down 3 percent in 2013. Additionally, livestock receipts that are nearly 6 percent higher than last year will not be sufficient to offset higher production expenses and the lower crop income. There are many more details in USDA’s financial picture for 2013.
Net cash income is typically higher than net farm income. For the past decade net farm income being more than net cash income has only happened on one prior occasion in 2004. At that time crop marketing was delayed, and with high production expenses, net cash income fell below net farm income.
Drought recovery in 2013 has been the primary economic dynamic with higher income levels for corn, beans, milk, and poultry.
The only downside to the larger crops and subsequent lower prices is the fact that more will go into storage compared to historical marketing patterns. USDA’s forecast for farm financial trends indicates that cash receipts for corn this year will decline significantly, but there will be a large increase in the year-end inventory offsetting any decline in income from the crop.
In fact, there will be a higher value of production for corn. USDA says domestic and foreign use of US corn will increase, as will ethanol production compared to 2012.
Soybean income will decline slightly, but higher yields and production will mean increases in the value of the stored soybean crop and the value of soybean production. There will be higher domestic and foreign use of the 2013 soybean crop.
Wheat income and value of production will decline in 2013, compared to 2012. That reflects reduced acres, a reduced crop size, lower prices, and smaller domestic use. There will be a slight increase in wheat exports for 2013, compared to last year.
Livestock, dairy, and poultry receipts for 2013 will be up, helped by larger gains in broilers, milk, and hogs. The higher hog forecast results from an increase in domestic and foreign sales at higher prices than in 2012.