The US Department of Agriculture predicts farm profitability will weaken for 2014. The Economic Research Service reports the 2014 net farm income forecast will be $96.9 billion this year, down 23.4 percent from the 2013 estimate of $126.5 billion. The 2014 forecast looks to be lowest since 2010, but will remain $14.5 billion above the 10-year average of $82.4 billion.
Schulz said he likes to look at the financial report to see the balance between the crop and livestock sectors of agriculture. In looking at the total percentage of all commodities typically cattle represents about 20 percent of the total commodities and corn represents about eight percent. In the drought stricken years of 2011 and 2012, corn was king in looking at farm receipts. In looking at the forecast for 2014, Schulz said there is a large increase in cattle receipts which reflects what has been seen in cash cattle trade as well as the moderation of corn prices.
Livestock receipts are expected to increase by more than 14 percent to $25.7 billion due to a 23 percent increase in dairy, 19 percent increase in cattle and eight percent increase in hog receipts. Crop receipts are forecast to decrease 12 percent in 2014 to $27.2 billion. That is led by a $10.5 billion decline in corn and $7.9 billion drop in soybean receipts. In looking ahead at the financial health of agriculture, Schulz said it also shows the need for strong demand for commodities that US farmers and ranchers are producing.
Click here to see more...