AFBF Looks At What’s Driving Farm Income Higher
Earlier this week, we told you USDA projects 2022 calendar year net farm income up nearly $20 billion, or 13.8% from 2021. What’s driving that increase?
“Predominantly, this is a price play with 97% of that increase in cash receipts attributable to increases in price," said American Farm Bureau Federation Senior Economist Veronica Nigh. "Now, it's not just all inflation either, because when you take out the inflation, farm income is forecast to increase by over 7%. So, it's mostly an increase in price. And you know, that's despite the fact that production expenses are forecast to increase by almost 19% in 2023.”
Nigh said USDA projects increases in cash receipts for crops such as wheat, corn and bean, as well as livestock, across the board. She added farm sector equity is expected to increase as well.
“Farm sector equity is expected to increase by almost 11% in 2022. USDA is projecting that debt to asset levels for the sector will improve as well," Nigh continued. "I think that's a little bit of an unexpected outcome given where we are with inflation today.”
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