There's no arguing that for most farmers, it's been a good year. How good? As we head into the fall harvest season, the USDA is forecasting what the farm economy will be worth in 2008. Total farm assets are expected to rise nearly 7 percent to $2.4 trillion dollars.
A large part of that dollar increase isn't due to the price of corn, it's due to the price of land. Real estate comprises 85 percent of all farm assets, and this is one place where there hasn't been a downturn.
Still, the total value of crop production is expected to jump 25 percent this year to $189 billion. Some of the greatest price growth--no surprise--is in corn, up 57 percent. Soybean values are expected to rise 47 percent. By the way, cotton income is supposed to dip a bit this year, and the sheep industry should stay flat. Who knew?
As for costs, well, those are going up, too. Total expenses are expected to jump 16 percent this year to nearly $300 billion. Some of the greatest jumps are in feed costs, up 26 percent, and fertilizer, up 58 percent.
Bottom line: Net cash income will break last year's record, up 16 percent to $101 billion. That includes $13.2 billion in direct government payments--11 percent more than a year ago.
We plan to head back to Iowa in about a month to see how the corn and soybean harvest is turning out, after all the dire predictions from earlier flooding. Iowa alone saw a 57 percent jump in the value of crop production from 2006-2007, to $10.7 billion, and a 79 percent jump in net income, to $5.3 billion. That's over $1,700 per Iowan. Commodities Party Fizzles, So Should Investors Bail?
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