** Perhaps not wise to count chickens before they are hatched.

In news for governments and legislators, there are predictions of significant drops in net income for farmers and ranchers.  This is a summary of one such report.

Don’t expect 2012 to be a mirror of last year’s high profits, but still better than the last 10 years.

 

Last year was a banner year for farmers, and it doesn’t appear 2012 will be a repeat in terms of farm income.

 

USDA has forecasted 2012 net farm income to be $91.7 billion, down $6.3 billion (6.5%) from the 2011 forecast. Net cash income is forecasted at $96.3 billion, down $12.5 billion (11.5%) from 2011.

 

But, the good times aren’t really over. This year’s net cash income forecast is still $15.9 billion above the 10-year average (2002-2011) of $80.3 billion.

Source Farm Journal Ag Web

I find it ironic that the SD Governor and the SD GOP legislators and SD city and county governments are planning on significant growth in tax revenues this coming year because of improved economic conditions while their GOP DC comrades in economic mythology are continuing to deny that anything the Obama administration did to prevent collapse of US and world economy did anything positive and instead was a negative factor. No sense mentioning US Senator Mitch McConnell's partisan violation of his Oath of office.

Meanwhile, the CEO of GM is noting what he thinks is an "unpopular" opinion...that Obama's courage in the face of GOP obstruction and recalcitrance actually saved the US auto industry.  Now, I the CEOs of the major farm equipment manufacturers would admit that nothing they did had anything to do with increased ag prices and consequent ag equipment sales and with courage and integrity skip taking absurd executive bonuses merely for breathing and occuping space.

** Stay tuned, the year is yet young and more surprises to come-- Doug Wiken

Comments

[Taunia]

Farmland prices in Missouri were up 18.5% in 2011, ranchland +11%.

Has there been a land price increase in SD?

I'm not a farmer, but doesn't land price increasing also directly affect farm incomes? I thought the higher the land prices, the higher everything else was also. Supply and demand.

From the article you linked to:
"•Increases in sales of corn, most other feed grains, and peanuts are predicted to offset declines in wheat, hay, vegetables/melons, and fruits/tree nuts."

With the ethanol subsidies drying up, won't there be a free fall in the corn market?

Thanks in advance for your reply, Mr. Wiken.

{{ Note from Doug:.Feb 16,2012 Primary beneficiary of increased land prices are tax collectors. For owners, the increased value may mean more collateral for loans if actively farming. For renters, the increased land prices may force higher rental costs. The land prices are driven by interest rates and commodity prices as well as availability..supply and demand.

Supply and demand may be influenced by outside investors who are not getting good returns on other investments. They keep saying that there isn't any more farmland being made.

The lasting impacts of even temporary commodity price increases can be both negative and positive. They seem to be often used as excuses to jack up grocery prices at rates which are seldom justified because of the commodity prices.
Wheat and corn prices could double or triple and the prices of a few ounces of breakfast cereal should only increase 10 cents or so. Such consumer prices seldom ever seem to come down even if commodity prices drop significantly. The same is true for the prices of farm equipment.

Not sure if that answered your question or if correct. If not, I hope somebody will offer corrective comment. ]]]]