usda outlook for the 2011 u.s. farm economy

2011 USDA Ag Outlook Forum

USDA Outlook for the2011 U.S. Farm Economy

Timothy ParkFarm and Rural Business Branch

Resource and Rural Economics Division


Value of agricultural sector production expected to increase $37.4 billion in 2011

$391.5

60

110

160

210

260

310

360

410

1990 1993 1996 1999 2002 2005 2008 2011f

$ Billion

Value of agricultural sector production

Value of crop production

Value of livestock production

Source: USDA, ERSNote: 2010, 2011 forecasts


Real value of projected agricultural sector production up 8.8 percent in 2011

$348.3

60

110

160

210

260

310

360

1990 1993 1996 1999 2002 2005 2008 2011f

$ Billion 2005 = 100

Value of agricultural sector production

Value of crop production

Value of livestock production



Crop cash receipts projected up $24.1 billion


0.00

10.00

20.00

30.00

40.00

50.00

60.00

Corn Soybeans Wheat Fruits and nuts

Vegetables Greenhouse and nursery

Cotton

$ Billion 2008 2009 2010f 2011f


Livestock cash receipts projected up $4.3 billion in 2011

0

10

20

30

40

50

60

Cattle & Calves Hogs Poultry and Eggs Dairy

2008 2009 2010f 2011f


$ Billion


Farm businesses represent almost 850,000 farms and account for 94 percent of

production

Farm Businesses

Small farms with sales less than $250,000

whose operators report farming as their ajor occupation.

Farms with sales greater than $250,000 and

farms organized as nonfamily

corporations or cooperatives.

Small farms whose

operators report they are retired or they had a

major occupation other than farming.

1,344,031

577,028 270,795


Higher average net cash incomes projected in 2011 for crop farm businesses

0

50

100

150

200

250

300

Mixed grain Wheat Corn Soybeans and peanuts

Cotton and rice

Specialty crops

Other Field Crops

$ Thousand 2008 2009f 2010f 2011f

Source: USDA, ARMSNote: 2010, 2011 forecasts


Average net cash incomes for livestock farm businesses expected to recede in 2011

0

50

100

150

200

250

300

Beef cattle Hogs Poultry Dairy

$ Thousand 2008 2009 2010f 2011f


2011 USDA Ag Outlook Forum9

Regional disparity for farm business income prospects in 2011

The farm level forecasts are derived from partial budget modeling on the 2009 Agricultural Resource Management Survey (ARMS)

using parameters from the sector forecasts.


0

4

8

12

16

20

24

28

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010f 2011f

Payments–fixed

Payments–conservation

Payments–function of crop prices

Payments–all other

10

Government payments forecast at $10.6 billion --- lowest since 1997

$ Billion


2011 USDA Ag Outlook Forum11

2011 expenses expected up 6.8%** 3rd largest increase since the late 1970’s **

Percent



Purchased input expenses projected up $16.4 billion in 2011

0

10

20

30

40

50

60

70

80

90

100

Farm Origin Manufactured Other

$ Billion 2008 2009 2010f 2011f



Farm origin expenses projected up $5.2 billion in 2011

0

10

20

30

40

50

Feed Seed Livestock and Poultry Purchased

$ Billion 2008 2009 2010F 2011F



0

5

10

15

20

25

Fertilizers Fuels and oils Electricity Pesticides

$ Billion 2008 2009 2010F 2011F

Manufactured input expenses forecast up $6.1 billion in 2011



0

10

20

30

40

50

60

Hired Labor Non-Operator Landlords

Lenders Total Payments

$ Billion 2008 2009 2010F 2011F

Payments to stakeholders expected to rise$2.7 billion in 2011



0

500

1,000

1,500

2,000

1987 1991 1995 1999 2003 2007 2011f

$ Billion 2005 = 100

Debt Equity

16

2011 real assets and equity anticipated to surpass 2007 peak values

Real farm sector assets, debt, and equity 1987-2011f



Share of farm assets financed by debt expected to decline in 2011

10.74

0

5

10

15

20

1991 1995 1999 2003 2007 2011f

Debt/Asset RatioPercent



2011f Change from 2010f

Value Agricultural Sector Production $391.5 $37.4

Purchased Inputs ( - ) $211.8 $16.4

Net Government Transactions ( - ) ($0.9) ($1.9)

Gross Value Added = $178.8 $19.1

Capital Consumption ( - ) $31.4 $0.8

Net Value Added = $147.4 $18.4

Payments to Stakeholders ( - ) $52.7 $2.7

Net Farm Income = $94.7 $15.7

Net farm income expected to rise in 2011

$ Billion



Agriculture’s strong financial performance continues in 2011. o Nominal records for all three measures of farm sector earnings

The projected increase in 2011 farm earnings favors cash grain,

cotton and oilseed producers.

Gains in receipts for specialty crop and livestock farms are not anticipated to offset higher production costs.

Most major expense categories are forecast to increase in 2011.

SUMMARY


http://www.ers.usda.gov/Briefing/FarmIncome/

• Farm Income and Costs• Overview• 2011 Farm Sector Income Forecast (Updated 2/14/11)• 2009 Farm Sector Income Estimates (Updated 8/31/10)• Farm Business Income• Assets, Debt, and Wealth• Farms Receiving Government Payments• Data Sources• Recommended Readings• Recommended Data• Glossary• • Debt Landscape for U.S. Farms Has Shifted•

Sign up for ERS Charts of Notehttp://www.ers.usda.gov/ChartsOfNote/

Briefing Room: Farm Income and Costs


USDA Outlook for the2011 U.S. Farm Economy

Timothy ParkFarm and Rural Business Branch

Resource and Rural Economics Division


0

20

40

60

80

100

120

140

1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010f

$ Billion

NominalReal (2005=100)

Farm sector profitability improves in 2011

Nominal and inflation adjusted net farm income, 1970-2011f


usda outlook for the 2011 u.s. farm economy

Documents