The U.S. Department of Agriculture has released its farm 2010 Farm Sector Income Forecast and it projects net farm income will increase this year. USDA projects income to be $63 billion for 2010, up $6.7 billion from 2009. The 2010 forecast is $1.4 billion below the 10-year average net farm income.
"Macroeconomic forces undergird our optimism in projecting a boost in 2010 farm income," USDA's Economic Research Service reports. "Fertilizer prices have fallen by about 50 percent in the past year. The dollar’s decline against other currencies should make agricultural exports of both crops and livestock/meat more competitive. Continued population growth, particularly in developing countries, will increase global demand if accompanied by rising incomes." Ethanol and biodeseil plants operating at greater potential in 2010 should help farm profits, ERS expects.
Of the various agricultural industries, ERS forecasts: "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." (Read more from Keith Good of FarmPolicy.com)
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