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All three measures of farm sector earnings are forecast to rise in 2010, rebounding from double-digit declines in 2009.
- Net cash income is expected to rise nearly 34 percent from 2009, and 28.8 percent above the previous 10-year average.
- Net value added, at $132.0 billion, is expected to be up $20 billion from 2009, and will be 22 percent above its 10-year average. An increase in the value of livestock production accounted for almost all of the upward movement in net value added. The value of dairy production is projected to rise by 29.6 percent, meat animal production by 16.4 percent, and poultry/egg production by 9.9 percent.
- Net farm income, while forecast to be $5.9 billion below its all-time nominal record in 2004, has shown a rebound from 2009, a year in which demand for agricultural products fell worldwide due to the global recession.
Large increase in U.S. cotton receipts
Cotton receipts in 2010 are expected to easily surpass 2009 as the 2010 U.S. lint price rises 24 cents per pound and quantities sold increase almost 12 percent. The quantity of cottonseed sold is expected to increase 48 percent, while its annual average price rises over $12 per ton. In the face of a world economic recovery, foreign beginning stocks are at a 7-year low, boosting the demand for U.S. exports in crop marketing year 2010. The U.S. upland crop is estimated to be almost 6.6 million bales above 2009, reflecting high yields, the lowest abandonment level in 60 years, and a large harvested area. U.S. cotton demand for the 2010 crop marketing year is expected to be well above last season, and U.S. exports are expected to be the second highest on record.
The anticipated increase in wheat sales reflects larger quantities sold at a slightly lower farm price. A rise in rice receipts is expected as an increase in quantity sold more than offsets an expected price decline. The USDA forecasts a record crop with total U.S. rice supply about 11 percent larger than the 2009 crop marketing year. Total exports are expected to be the second highest on record.
Soybeans are expected to exceed last year’s record crop. Strong foreign demand for U.S. soybean exports, especially from China, means that exports for marketing year 2010 are expected to break last year’s record. A forecast decline in the annual price of peanuts is expected to offset an increase in quantities sold. The 2010 yield is the fourth highest on record. Domestic food use of peanuts is expected to rise in crop marketing years 2009 and 2010 while exports, which declined in 2009, are expected to recover some of their lost ground in crop marketing year 2010.
Corn sales are expected to increase with expected increases in bio-energy demand. Declines are expected in both price and quantity sold for barley, while an increase in oat price will fail to offset a decline in its quantity sold. Oat production for the 2010 crop marketing year is down from 2009 and, if realized, would be a record low. A slight decline in hay receipts is anticipated as an increase in hay sold is expected to be more than offset by a decline in price. This reflects a decline in roughage-consuming animal units.
Potatoes are expected to experience declines in both price and quantity sold. Dry bean sales are expected to increase as increased quantities sold more than make up for a decline in their price. As a result of the smaller fresh-market storage crop and continued good domestic and export demand, onion prices may remain above year-earlier levels until next spring. Declines are expected in the quantities sold for apples, sweet cherries, pecans, and walnuts, while increases are expected for avocados, cranberries, and almonds. California is expected to produce a record navel crop, whereas Florida total citrus production is projected to fall 16 percent.
Dairy receipts are expected to increase by almost one-third in 2010 as average milk prices received by dairy farmers are expected to increase more than $3.50 per cwt. Meanwhile, cattle and calf cash receipts are expected to increase 13 percent in 2010 due to increased slaughter. Hog cash receipts are expected to increase 26 percent over 2009 due to stable pork demand and lower year-over-year pork production. Broiler cash receipts are expected to have increased almost 11 percent in 2010 over 2009 cash receipts due to an increase in prices and the gradual reopening of exports to Russia. Egg cash receipts are expected to increase slightly in 2010 due to increased production and slightly higher year-over-year prices.