All of the newspaper and television headlines will scream that net farm income for 2013 will be up 14% compared to last year. And many of those readers and viewers will remember prior headlines that indicated farmers were raking in cash from the USDA’s crop insurance program at levels higher than they would have received in a normal production year. Unfortunately, agriculture needs Paul Harvey to tell, “The rest of the story.”
USDA’s Economics Research Service (ERS) just released its financial projections for 2013, based on trend yields and estimated supply and demand for farm commodities. The forecast is for net farm income (NFI) to be $128.2 billion, which is 14% higher than in 2012. What will either not be included in the news story – or buried – will be the ERS projection for net cash income, (NCI) which is different.
Net Cash Income
NCI is forecast to be down by 9% and that is the amount of cash in your bank account, and does not include the unsold inventory at the end of the year. NCI is forecast to be down, nationally and in your account, due to higher production expenses and less commodities that are actually sold this year, but carried over to 2014 due to low prices. That is not a sexy economic statistic, so no one will want to talk about NCI.