The USDA Wednesday released latest figures on net farm income, projecting a 6% increase from 2012's estimate of $113.8 billion to $120.6 billion for 2013.
USDA Secretary Tom Vilsack noted in a statement that a 6% increase in the farm income forecast would be the highest inflation-adjusted amount since 1973, even as agriculture overcomes the 2012 drought.
Though net farm income is expected to increase, net cash income – the difference between cash expenses and commodities sold plus other sources of farm income – is forecast at $120.8 billion, down just more than10% from 2012.
Even so, 2013's forecast would be the fourth time net cash income has exceeded $100 billion since 1973 after adjusting for inflation.
Production expenses up
In both nominal and inflation-adjusted dollars, 2013 production expenses are expected to be the highest on record. Rent, labor, and feed are the expense items expected to increase the most in 2013, USDA said.
Overall, USDA projects a $13.1 billion increase in total expenses in 2013, to $354.2 billion. According to USDA, that continues a string of large year-to-year movements that have taken place since 2002.
Farm sector assets, debt, and equity are all forecast to increase in 2013. As in the last several years, increases in farm asset value are expected to exceed increases in farm debt, with farm real estate the main driving force.
However, both the debt-to-asset ratio and debt-to-equity ratio for the farm sector are expected to reach historic lows.
Vilsack renews policy call
Vilsack said the forecast of higher net farm income is a "testament to the resilience and productivity of U.S. farmers and ranchers, and a further sign of the positive momentum they have achieved over the past five years.
"I am confident that our farmers and ranchers will continue to show the determination and innovation that has been the hallmark of American agriculture for generations," Vilsack said.
Vilsack also used the opportunity to call attention to the lack of a five-year farm bill and new immigration policy.
"Producers and rural communities are counting on Congress to provide a comprehensive, long-term Food, Farm and Jobs Bill that will lend certainty to Federal farm policy – as well as passage of a commonsense immigration reform measure to ensure a stable and dependable agricultural workforce in the years to come."