USDA Raises 2013 Farm-Income Forecast; Bumper Corn, Soybean Harvests Help Raise Outlook
Federal forecasters increased their estimate for U.S. farm income this year by 9% to $131 billion, as bumper corn and soybean harvests help farmers offset lower prices for their crops.</br></br>Net farm income will rise 15% from $113.8 billion last year to the highest level on an inflation-adjusted basis since 1973, the U.S. Department of Agriculture projected Tuesday.</br></br>The income gains reflect a sharp increase in production of corn and soybeans in the U.S. Midwest just a year after a severe drought curtailed harvests. Profits also are expected to be higher because growers of crops such as hay, vegetables and nuts are enjoying higher prices, the USDA said.</br></br>But economists warned the farm-income boom likely will soften next year because a steep drop in the prices of corn, soybeans and wheat will carry into 2014 and squeeze farmers' profits. The price of corn, for example, has fallen to about $4 a bushel from $8 a bushel during last year's drought.</br></br>"Next year's income is going to be a lot softer," said Michael Swanson, an agricultural economist with Wells Fargo & Co.