USDA Chief Economist Keith Collins expects farmers to bring in more money from crops in 2007 than they did in 2006, thanks to strong demand for grains.
Although farmers' net income fell this year, even with government subsidy payments, it was a good year for cash receipts for crops, a trend which Collins expects to be stronger yet in 2007.
"We're looking at very strong prices in the futures market for delivery in 2007, so it looks right now like 2007 is going to be a very strong cash-receipt year for crops," Collins said in a message on USDA's Web site.
Collins says that while farmers will continue to get more from grains, they will also be getting less from the government, as price-based payments have gone down while market prices strengthened in 2006. Collins expects the government to pay $16.5 billion in direct payments to farmers in 2006, down from last year's $24 billion.
In 2005, combined cash receipts for crops and livestock were $238.9 billion, and USDA's Economic Research Service expects them to reach $242 billion in 2006. The first official USDA forecast for 2007 is scheduled for February.