WASHINGTON U.S. farm income will hit a 40-year high in 2013, driven by gains in livestock income, according to a new forecast from the U.S. Department of Agriculture on Tuesday.
USDA's Economic Research Service estimated net farm income of $131 billion for 2013, up significantly from an earlier forecast of $120.6 billion and up 15 percent from $113.8 billion in 2012.
After adjusting for inflation, net farm income for 2013 is expected to be the highest since 1973, USDA said. Net farm income has been on an almost unbroken upward trend since 2002.
Cash crop receipts will fall 3 percent in 2013, USDA said, as some of the year's larger crops, especially corn and soybeans, will not be sold by year-end.
That decline, as well as rising expenses, will be partially offset by an almost 6 percent increase in livestock receipts.
Net cash income is forecast to decline by 3.4 percent on the year, to $129.7 billion, although that estimate has been hiked by almost $9 billion since August.
Production expenses continue to climb, up 3 percent to $352 billion, but rising at a slower pace than in 2012 and 2011.
USDA said increases in farm asset values are expected to continue to exceed increases in farm debt, leading to another record high for farm equity.
Farm asset values -- chiefly farmland -- are expected to rise by 7 percent in 2013 and farm sector debt by 3.3 percent, pushing farm equity up by a strong 7.4 percent.
"Farmland values are expected to continue rising, given the relative strength of commodity prices, accommodating interest rates, and expectations of continued favorable net returns both from the market and from government programs, including crop insurance," USDA said.
(Reporting by Ros Krasny; Editing by Gerald E. McCormick and Leslie Adler)