U.S. farm income will jump 31 percent this year to a record $103.6 billion because of higher crop and livestock prices, the government said.
The U.S. Department of Agriculture boosted its forecast from $97.3 billion forecast in February. Income last year totaled $79.1 billion. Receipts from sales of farm commodities will jump 18 percent from last year, with values for crops including corn, soybeans, wheat and cotton surging to $33.6 billion and livestock sales climbing to $22.4 billion, the department said Tuesday in a report on its website.
Rising farm incomes, which increase land values and spur purchases of Monsanto Co. seeds, Agrium Inc. fertilizer and Deere & Co. tractors, have been driven by greater demand for exports and biofuels. The U.S. may ship a record $137 billion of farm goods overseas, the USDA said in May. That figure will be updated tomorrow. Ethanol will consume a record 5.1 billion bushels, or 39 percent, of this year’s projected corn crop, the department said on Aug. 11.
“The variability of yields has made a huge difference for individual farmers,” Daryll Ray, the director of the Agricultural Policy Analysis Center at the University of Tennessee in Knoxville, said in an interview before the report was released.
Before Tuesday, corn futures soared 74 percent from a year ago, soybeans were up 42 percent and wheat 13 percent while cotton reached a record in March. The increases are offsetting lower yields for some grains and oilseeds and a projected smaller cotton crop, pushing profits above the USDA’s February prediction.
Expenses such as diesel fuel and animal feed were projected to rise by $32.5 billion, exceeding $300 billion for the first time, the USDA said. Government payments will increase almost 18 percent to $10.2 billion, according to the report.
The increase in farm income drove agricultural real-estate prices to a record $2,350 an acre this year, the USDA said in a report earlier this month. Deere, the world’s largest farm- equipment maker, reported fiscal third-quarter profit on Aug. 17 that topped analysts’ estimates and raised its full-year earnings forecast as global demand improved.
Tuesday’s estimates will be revised in November.
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