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2012 US Net Farm Income At a New Record Even With The Drought!

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August 28th, 2012

In a report from the USDA issued today, they project that net cash income from farming will increase by 3.4 percent from 2011 to a new record of $122.2 billion.  Net value added is expected to increase by $5.9 billion to $172.6 billion.

Due to the market effects of the drought and the expected large crop insurance payments, these increases are expected to be much greater than any resulting increases in input costs or livestock losses.

Gross farm income is expected to hit a new record of about $450 billion.  This number was as low as $300 billion just five years ago.

Total production expenses are expected to increase by $18.6 billion or about 6 percent over 2011.  It is interesting how fertilizer prices always seems to increase with grain prices.

Unlike 1988 when little revenue protection crop insurance was available, this year more farmers will benefit for these and other crop insurance policies which will keep net farm income high.

Paul Neiffer

Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a partner with CliftonLarsonAllen in Yakima, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. In fact, Paul drives combine each summer for his cousins and that is what he considers a vacation.

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