Net farm income is forecast to be $91.7 billion in 2012, down $6.3 billion (6.5 percent) from the 2011 forecast. Net cash income, at $96.3 billion, is forecast down $12.5 billion (11.5 percent) from 2011, but would remain $15.9 billion above the 10-year average (2002-2011) of $80.3 billion.
Net farm income reflects income from production in the current year, whether or not sold within the calendar year; net cash income reflects only the cash transactions occurring within the calendar year. Net farm income is a measure of the increase in wealth from production, whereas net cash income is a measure of solvency, or the ability to pay bills and make payments on debt.
Net value added is expected to decrease by almost $4.2 billion in 2012 to $145.1 billion. While farm income can vary widely from year to year, the declines in each of these three farm income measures are the smallest decreases recorded since 2000. The 2012 inflation-adjusted forecasts of both net value added and net farm income are the third highest values recorded since 1980. Net value added is only 4.7 percent below the peak value reached during this period in 2011.
- All three measures of farm income are expected to decline this year, but remain above 2010 levels. Net cash income is forecast at $96.3 billion, a decline of $12.5 billion from 2011.
- Crop receipts are expected to experience a slight increase in 2012. A marginal decline is anticipated for 2012 U.S. livestock sales.
- Increases in sales of corn, most other feed grains, and peanuts are predicted to offset declines in wheat, hay, vegetables/melons, and fruits/tree nuts.
- Drought in the U.S. in 2011 is expected to depress 2012 sales of many crops.
- Sales of red meats are anticipated to remain high, while a price-led decline in milk sales is forecast.
- Total production expenses are forecast to rise $12.5 billion (3.9 percent) in 2012 to $333.8 billion.
- The major 2012 crop-related expenses (seeds, fertilizer, pesticides) are projected to increase moderately (around 1.0 percent) as a group while the key livestock-related expenses (feed, livestock/poultry purchases) are forecast to rise 2.1 percent.
- Government payments paid directly to producers are expected to total $11.0 billion in 2012, a 4-percent increase from the preliminary estimate of $10.6 billion paid out in 2011.
See annual prices for commodities.
Amounts in this article are in nominal dollars. Estimates and forecasts in constant (2005=100) dollars are available.
Source: Farm Income and Costs report