Wednesday, August 29, 2012

Amid drought, farm income predicted to be way up

With 2012 corn and soybean supplies expected to be the lowest in almost a decade and their prices at new highs, partly because of an exceptional drought in much of the southern Midwest, U.S. net farm income is set to hit its highest levels since 1973 despite the drought's impact on production, according to Tuesday's U.S. Department of Agriculture farm and cost report.

In real numbers, that means net cash income for farms could exceed $139 billion. Agri-Pulse reports that  "the balance sheet also looks extremely good," with farm equity expecting to increase to an all-time high of almost $2.3 trillion in value. "Debt repayment capacity utilization -- a measure of farm exposure to financial risk -- is forecast to be at its lowest since 1970," the agricultural newsletter explained.

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