WASHINGTON (Reuters) - The U.S. agricultural sector will enjoy record high income in 2013 as bin-busting grain harvests in the Midwest more than offset expected lower prices, the Department of Agriculture said on Tuesday.
Net farm income in the United States will reach $120.6 billion this year, up 6 percent from 2012 but down from the $128.2 billion preliminarily forecast in February, mostly reflecting updated forecasts for cash corn receipts.
When adjusted for inflation, net farm income will be the second highest since 1973, USDA said.
In unadjusted terms it will exceed the previous high of $118 billion in 2011; as recently as 2009 net income was just $60.4 billion.
By contrast, net cash income was forecast to fall more than 10 percent in 2013 from the previous year, to $120.8 billion. The USDA attributed the decline to substantial crop stockpiles expected at year-end.
“Not all crops produced in 2013 will be sold by the end of the 2013 calendar year; we anticipate substantial increases in the annual quantity and value of crop inventories, particularly for corn,” USDA said.
Increases in farm asset values are expected to continue to exceed increases in farm debt, netting a record high for farm equity, the government said.
Cash receipts are expected to fall 5.5 percent on the year for crops but rise 4.9 percent for livestock, for a 1 percent overall decline.
Corn and soybean prices are retreating from the record highs of 2012, which resulted from the worst drought in decades. The USDA expects average farm prices for corn in 2013 of $5.85 per bushel, down 13 percent on the year, and for soybeans of $12.88, down 6 percent.
Large gains in chicken and milk sales will power a 5 percent increase in the value of livestock, dairy and poultry production, the USDA said. Broiler exports are expected to rise 3 percent this year, with milk exports up 17 percent.
Also rising in 2013 will be farm production expenses, by 3.8 percent to a record $354 billion. But feed costs, a major component of livestock production, should fall sharply in the second half of 2013 as abundant new-crop supplies reach the market, USDA said.
Reporting by Ros Krasny; Editing by Gerald E. McCormick