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USDA Releases Farm Financials Forecast

USDA Releases Farm Financials Forecast

Farm solvency position remains strong.

According to USDA's Economic Research Service net farm income will be up nearly 20% in 2011, totaling $94.7 billion. This is despite a $20 billion jump in production expenses. The 2011 forecast is the second highest inflation-adjusted value for net farm income recorded in the past 35 years. Cash receipts are expected to increase 9.1%, with cotton, soybean, wheat, and corn receipts showing the largest gains.

The value of the farm sector's equity or net worth is forecast to rise 6.8%. The estimated increase is largely due to an estimated 6.3% increase in the value of farm business real estate. The farm business sector's debt-to-asset ratio is expected to decline from 11.3% in 2010 to 10.7% in 2011, and the debt-to-equity is expected to decline to 12.8% in 2010 to 12.0% in 2011. This indicates the farm sector's solvency position remains strong.

In 2011, average family farm household income is forecast to be up 4.0% over 2010 to $86,352. Both on-farm and off-farm income are forecast to be up in 2010 and 2011, compared to the previous years. In 2011, 12.9% of the income of farm families is expected to be from farm sources, with the rest from off-farm income.

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