The farm economy is quite strong and 2011 is expected to bring record numbers, according to USDA Chief Economist Joe Glauber. Speaking before a crowd of nearly 2,000 people during the Agricultural Outlook Forum in Alexandria, Va., Glauber said that agriculture is poised to set records in farm income, land values and cash receipts.
Exports are leading the way, topping a record $135.5 billion, beating the original record by more than $20 billion. China takes over as the number one market for exports with $20 billion, surpassing Canada, which stands at $18.5 billion.
“China is a major importer for a number of commodities, accounting for almost 60 percent of world soybean imports, 40 percent of world cotton imports and about 20 percent of total soybean oil imports, said Glauber. “These three commodities accounted for about three quarters of total US agricultural exports to China last year.”
Net cash farm income is projected to rise to $98.6 billion. Cash receipts for producers are forecast to be up $28 billion from 2010, reaching a record $341 billion; however, cash production expenses are forecast to reach $274 billion, up $20 billion from last year.
Farm assets may increase by 6.1 percent wit farm real estate increasing by 6.3 percents. According to Glauber, within two years, the farm economy has rebuilt the equity lost in 2009.
Glauber cautioned that high prices will result in competition for acreage. Total area planted to eight major field crops is projected to be 255 million acres, an increase of 9.8 million when compared to 2010 figures. If realized, the planted acreage would be the highest since 1998.
Corn use for ethanol has slowed, but at 13.5 million gallons, remains well above the renewable fuel standards.
Agriculture will remain strong, according to Glauber. After 60 years of declining agricultural prices, are we going to see an increase? “Whether the current period marks a turning point will depend largely on whether over the long run productivity gains will continue to offset the growth in demand caused by rising population and income,” said Glauber.
