U.S. Farm Income Randy Schnepf Specialist in Agricultural Policy August 30, 2013 Congressional Research Service 7-5700 www.crs.gov R40152 CRS Report for Congress Prepared for Members and Committees of Congress U.S. Farm Income Summary According to USDA’s Economic Research Service (ERS), national net farm income—a key indicator of U.S. farm well-being—is forecast at a record $121 billion in 2013, up 6% from last year, and about $3 billion above 2011’s previous record. In addition to record net farm income, farm wealth is also at record levels. Farm asset values— which reflect farm investors’ and lenders’ expectations about long-term profitability of farmsector investments—are expected to rise nearly 7% in 2013 to a record $3,101 billion for a fifth consecutive year of gains. Farm land cash markets have continued to see gains related to strong crop prices in 2013. Since 2008, farm asset values are up 49% while farm debt has risen by only 28%. As a result, the farm debt-to-asset ratio has declined steadily since 2008 and is expected to fall to 10.2%, its lowest level since 1960. The 2013 outlook for a third year of strong farm income occurs in spite of slow growth in the domestic economy and the lingering effects of the 2012 drought—the most severe and extensive drought in at least 25 years. The 2012 drought destroyed or damaged a significant portion of the U.S. corn and soybean crops, with deleterious impacts on all U.S. livestock sectors—cattle, hogs, poultry, and dairy—as feed costs reached record levels. The drought’s eventual effect on food prices at the retail level continues to be felt in 2013. In general, a return to trend yields in 2013 (assuming normal weather) is expected to generate record-large harvests of major crops which, in turn, would likely benefit livestock producers in the second half of the year as crop prices are expected to decline from record-high levels. Cash grain farmers in the Corn Belt and Northern Plains are expected to experience a third year of near-record revenues as a return to trend yields would offset a substantial portion of the anticipated crop price decline. However, the expected increase in crop and total output in 2013 is also projected to lead to unusually large increases in marketing, storage, and transportation expenses and miscellaneous expenses. Government farm payments, at about $11 billion, are expected to remain relatively small in 2013 (third-lowest total since 1997) as high commodity prices continue to shut off payments under the price-contingent marketing loan and counter-cyclical payment programs. These data suggest a strong financial position heading into 2013 for the agricultural sector as a whole relative to the rest of the U.S. economy, but with substantial regional variation. Eventual 2013 agricultural economic well-being will hinge greatly on the 2013 crop harvests, as well as both domestic and international macroeconomic factors including economic growth and consumer demand. Congressional Research Service U.S. Farm Income Contents Introduction...................................................................................................................................... 1 Highlights of 2013 Farm Income Forecast ...................................................................................... 2 Outlook for U.S. Agriculture for 2013 ...................................................................................... 4 Recap of U.S. Agriculture in 2012 ............................................................................................ 5 Cash Receipt Highlights .......................................................................................................... 12 Crop Highlights ................................................................................................................. 12 Livestock Highlights ......................................................................................................... 13 Government Payment Highlights ...................................................................................... 14 Production Expense Highlights ............................................................................................... 16 Agricultural Trade Outlook ..................................................................................................... 17 Farm Asset Values and Debt .......................................................................................................... 19 Average Farm Household Income ................................................................................................. 21 On-Farm vs. Off-Farm Income Shares .................................................................................... 21 U.S. vs. Farm Household Income ............................................................................................ 21 Farm Household Income by Sales Class ................................................................................. 23 Figures Figure 1. Annual U.S. Farm Sector Nominal Income, 1960 to 2013F............................................. 3 Figure 2. Annual U.S. Farm Sector Inflation-Adjusted Income, 1960 to 2013F ............................. 3 Figure 3. U.S. Farm Gross Revenue, Production Expenses, and Net Income ................................. 4 Figure 4. Drought Conditions Reappear for Plains States and Western Corn Belt .......................... 5 Figure 5. Widespread Drought Damaged 2012 Crop Output........................................................... 6 Figure 6. U.S. Corn Stocks (as Share of Use) to Grow in 2013/2014, While Prices Fall ................ 7 Figure 7. U.S. Soybean Stocks (as Share of Use) Remain Near Historic Lows .............................. 7 Figure 8. Monthly Farm Prices for Corn, Soybeans, and Wheat, Nominal Dollars ........................ 8 Figure 9. Monthly Farm Prices for Corn, Soybeans, and Wheat, Indexed Dollars ......................... 8 Figure 10. Monthly Farm Prices for Cotton and Rice, Nominal Dollars ......................................... 9 Figure 11. Monthly Farm Prices for Cotton and Rice, Indexed Dollars .......................................... 9 Figure 12. Monthly Farm Prices for Cattle and Milk, Nominal Dollars ........................................ 10 Figure 13. Monthly Farm Prices for Cattle and Milk, Indexed Dollars ......................................... 10 Figure 14. Monthly Farm Prices for Hogs and Broilers, Nominal Dollars.................................... 11 Figure 15. Monthly Farm Prices for Hogs and Broilers, Indexed Dollars ..................................... 11 Figure 16. Farm Cash Receipts by Source, 1990 to 2013F ........................................................... 12 Figure 17. Crop Cash Receipts by Source, 2007 to 2013F ............................................................ 13 Figure 18. U.S. Livestock Product Cash Receipts by Source, 2007 to 2013F ............................... 14 Figure 19. U.S. Government Farm Support, Direct Outlays, 1997 to 2013F ................................ 15 Figure 20. Farm Cash Production Expenses by Source, 2007 to 2013F........................................ 17 Congressional Research Service U.S. Farm Income Figure 21. U.S. Agricultural Trade Since 1970.............................................................................. 18 Figure 22. U.S. Agricultural Trade: Bulk vs. High-Value Shares .................................................. 18 Figure 23. U.S. Agricultural Export Value as Share of Gross Cash Income .................................. 19 Figure 24. U.S. Average Farm Land Values, 1985 to 2013F ......................................................... 20 Figure 25. U.S. Farm Debt-to-Asset Ratio Since 1960.................................................................. 21 Figure 26. U.S. Average Farm Household Income, On- and Off-Farm Sources, Since 1960 .................................................................................................................................. 22 Figure 27. Comparison of Farm to U.S. Average Household Income Since 1960 ........................ 22 Figure 28. Ratio of Farm to U.S. Average Household Income Since 1960 ................................... 23 Tables Table 1. Distribution of Farms and Value of Production by Gross Farm Sales, 2011 ................... 24 Table 2. U.S. Crop and Livestock Revenue by Source, 2008-2013F ............................................ 25 Table 3. U.S. Farm Production Expenses by Source, 2008-2013F ................................................ 26 Table 4. Annual U.S. Farm Income Since 2006 ............................................................................. 27 Table 5. Average Annual Income per U.S. Household, Farm versus All, 2006-2013F .................. 28 Table 6. Average Annual Farm Sector Debt-to-Asset Ratio, 2006-2013F ..................................... 28 Table 7. U.S. Prices and Support Rates for Selected Farm Commodities Since 2008/09 Marketing Year ........................................................................................................................... 29 Contacts Author Contact Information........................................................................................................... 30 Congressional Research Service U.S. Farm Income Introduction The U.S. farm sector is vast and varied. It encompasses production activities related to traditional field crops (such as corn, soybeans, wheat, and cotton) and livestock and poultry products (including meat, dairy, and eggs), as well as fruits, tree nuts, and vegetables. In addition, U.S. agricultural output includes greenhouse and nursery products, forest products, custom work, machine hire, and other farm-related activities. The intensity and economic importance of each of these activities, as well as their underlying market structure and production processes, vary regionally based on the agro-climatic setting, market conditions, and other factors. As a result, farm income and rural economic conditions may vary substantially across the United States.1 However, this report focuses singularly on aggregate national net farm income and the farm debtto-asset status as reported by the U.S. Department of Agriculture (USDA).2 Annual U.S. net farm income is the single most watched indicator of farm sector well-being, as it captures and reflects the entirety of economic activity across the range of production processes, input expenses, and marketing conditions that have persisted during a specific time period. When national net farm income is reported together with a measure of the national farm debt-to-asset situation, the two summary statistics provide a quick indicator of the economic well-being of the national farm economy. Measuring Farm Profitability Two different indicators measure farm profitability: net cash income and net farm income. Net cash income compares cash receipts to cash expenses. As such, it is a cash flow measure representing the funds that are available to farm operators to meet family living expenses and make debt payments. For example, crops that are produced and harvested but kept in on-farm storage are not counted in net cash income. Farm output must be sold before it is counted as part of the household’s cash flow. Net farm income is a value of production measure, indicating the farm operator’s share of the net value added to the national economy within a calendar year, independent of whether it is received in cash or noncash form. As a result, net farm income includes the value of home consumption, changes in inventories, capital replacement, and implicit rent and expenses related to the farm operator’s dwelling that are not reflected in cash transactions. Thus, once a crop is grown and harvested it is included in the farm’s net income calculation, even if it remains in on-farm storage. • Net cash income is generally less variable than net farm income. Farmers can manage the timing of crop and livestock sales and of the purchase of inputs to stabilize the variability in their net cash income. For example, farmers can hold crops from large harvests to sell in the forthcoming year, when output may be lower and prices higher. • Off-farm income and crop insurance subsidies, both of which have increased in importance in recent years, are not included in the calculation of aggregate farm income. • Off-farm income is included in the discussion of farm income at the household level in the last section of this report. 1 For information on state-level farm income, see the “U.S. and State Farm Income and Wealth Statistics,” available as part of the Farm Income and Wealth Statistics, Farm Income and Costs, Farm Economy Topics, Economic Research Service (ERS), USDA, at http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx. 2 For a more detailed discussion of the issues in this report, see the Briefing Room “Farm Income and Costs: 2013 Farm Sector Income Forecast,” ERS, USDA, at http://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/ highlights-from-the-2013-farm-income-forecast.aspx. Congressional Research Service 1 U.S. Farm Income Highlights of 2013 Farm Income Forecast Net farm income and total farm wealth are forecast record high in 2013, while the debt-to-equity ratio is expected to decline to the lowest level since 1960. These data suggest a strong financial position heading into 2013 for the agricultural sector as a whole relative to the rest of the U.S. economy, but with substantial regional variation. 3 4 • U.S. net farm income is forecast at a record $120.6 billion in 2013, about $7 billion (6%) above 2012 and $3 billion above 2011’s previous record (Figure 1 and Table 4).3 When adjusted for inflation (Figure 2), 2013’s net farm income forecast is expected to be slightly behind 2011 and the second-highest since 1974, but well below 1973’s peak. • Measured in cash terms, net cash income in 2013 is projected lower at $120.8 billion, down 10% from 2012’s record level but the third-highest on record. The decline in cash income compared to farm income is expected to result from substantial increases in 2013 end-of-year inventories (up $10.5 billion) as farmers postpone marketing into 2014. • Record farm asset values in 2013 ($3,010 billion), driven by record land values, are expected to exceed increases in farm debt ($308 billion), resulting in a fifth successive record high for farm equity ($2,702 billion) and a debt-to-equity ratio of 10.2%, lowest since 1960. • A return to trend yields coupled with important increases in crop planting—driven primarily by high farm prices due to drought-reduced supplies in 2012 (Figure 5)—are expected to result in large production increases that offset price declines in 2013. • Farm prices for most feedstuffs—feed grains (corn, sorghum, barley, and oats), hay, and protein meals—as well as soybeans hit record highs in the 2012/2013 crop year but have declined into mid-2013. However, commodity prices remain well above government support levels, such that total government payments in 2013 are projected to remain relatively low for a third consecutive year (Figure 19). • The effects of the 2012 drought-related increase in farm-level commodity prices were substantially muted as they moved slowly through the supply chain to retail food prices, and are projected to contribute to 1.5% to 2.5% food price inflation in 2013, compared with 2.6% in 2012. A prolonged lag in animal product prices is expected to make a noticeable effect in 2014, when food prices are projected up 2.5% to 3.5%. • Market returns for the 2012/2013 crop year were bolstered by large crop insurance indemnity payments related to 2012 crop losses—estimated in excess of $17.3 billion as of August 26, 2013.4 • Total production expenses are projected record large ($354 billion) in 2013, driven by feed costs ($61 billion), labor expenses ($33 billion), fertilizer costs ($28 billion), and net rent to non-operator landlords ($16.8 billion). USDA, ERS, Farm Sector Income & Finances, updated August 27, 2013. USDA, Risk Management Agency (RMA), FCIC Summary of Business, August 26, 2013. Congressional Research Service 2 U.S. Farm Income Figure 1. Annual U.S. Farm Sector Nominal Income, 1960 to 2013F Source: USDA, ERS, “2013 Farm Income Forecast,” August 27, 2013. Notes: All values are in nominal terms, that is, not adjusted for inflation. 2012 is preliminary, 2013 is forecast. Figure 2. Annual U.S. Farm Sector Inflation-Adjusted Income, 1960 to 2013F Source: USDA, ERS, “2013 Farm Income Forecast,” August 27, 2013. Notes: All values are adjusted for inflation using the Bureau of Labor Statistics (BLS), Consumer Price Index (CPI) where 2002-2003=100. 2012 is preliminary, 2013 is forecast. Congressional Research Service 3 U.S. Farm Income Figure 3. U.S. Farm Gross Revenue, Production Expenses, and Net Income Source: USDA, ERS, “2013 Farm Income Forecast,” August 12, 2013. Notes: All values are in nominal terms, that is, not adjusted for inflation. 2012 is preliminary, 2013 is forecast. Outlook for U.S. Agriculture for 2013 The two largest U.S. commercial crops—in terms of both value and quantity—are corn and soybeans. These two crops provide important inputs for domestic livestock, poultry, and biofuels sectors. In addition, the United States has traditionally been one of the world’s leading exporters of corn and soybean products—vegetable oil and meal. As a result, the outlook for these two crops is critical to both farm sector profitability and regional economic activity across large swaths of the United States, as well as in international markets. Heading into the 2013 crop year, both corn and soybeans had ending-season stocks projected at or near historic low levels relative to annual usage (Figure 6 and Figure 7). As a result, marketwatchers including U.S. corn growers, livestock feeders, ethanol producers, and policymakers were very concerned about area and yield prospects heading into the 2013 growing season. Based on record-high commodity prices in early 2013 (Figure 8), most market watchers anticipated substantial increases in planted acres for both corn and soybeans. However, an exceptionally wet spring across major crop regions of the corn-belt and prairie states resulted in substantial delays in crop planting as well as above-average prevented planting acres. A lateplanted crop tends to be more vulnerable to summer heat and dryness, and an early frost in the fall, because the normal growing cycle is pushed later into the summer and fall months. Despite the delay in plantings, producers—driven by record-high farm prices—still managed to plant 97.4 million acres of corn, the most since 1936, and a record 77.7 million acres of soybeans. As a result, in its preliminary outlook report for the 2013 crop year, USDA forecast a record harvest Congressional Research Service 4 U.S. Farm Income for both crops.5 In early summer, the outlook for a return to normal weather patterns and trend yields, combined with the large planted acres, began to weigh on market prices. By early August, USDA projected U.S. corn production at a record 13.8 billion bushels and a near-record soybean crop of 3.3 billion bushels.6 If realized, this would likely result in substantially lower crop prices in general and lower feed costs in particular during the remainder of 2013 and into early 2014. However, by late August crop conditions had returned to drought-like weather across much of the western corn belt (Figure 4), and commodity futures contract prices turned sharply upward in the last week of August. As a result and despite relatively high meat and dairy products prices (Figure 12 and Figure 13), the U.S. livestock, poultry, and dairy sectors have been under severe economic pressure, squeezed by high prices for their major cost component—feed grains and protein meals (derived primarily from crushing oilseeds) since mid-2012. A second consecutive year of crop harvests below expectations will likely do little to relieve the financial pressures on these sectors. Figure 4. Drought Conditions Reappear for Plains States and Western Corn Belt Source: USDA at http://droughtmonitor.unl.edu/. Recap of U.S. Agriculture in 2012 The 2012/2013 growing season will be remembered for the dramatic reversal of fortunes whereby early springtime prospects for record harvests and low commodity prices were transformed in a two-month period into an outlook of supply shortages and record-high commodity prices. 5 World Agricultural Outlook Board (WAOB), World Agricultural Supply and Demand Estimates (WASDE) Report, May 10, 2013. 6 WAOB, WASDE, August 12, 2013. Congressional Research Service 5 U.S. Farm Income Springtime planting conditions in 2012 were nearly ideal across much of the United States and farmers responded by planting early and extensively—from fence row to fence row in response to high commodity prices. On June 12, USDA projected U.S. corn plantings of 95.9 million acres— the most since 1937. Normal weather patterns were expected to produce a record 2012 corn harvest of 14.8 billion bushels which, in turn, would lead to a build-up in U.S. corn ending stocks in 2013 of nearly 2 billion bushels (up 111% year-to-year), and a 2012/2013 season-average corn price of $4.60/bushel (down 25%).7 However, in mid-June, an extensive swath of the Central and Southern Plains and much of the Corn Belt were hit by a combination of extreme heat and dryness that produced what was referred to as a “flash drought” (Figure 5). Figure 5. Widespread Drought Damaged 2012 Crop Output Source: USDA at http://droughtmonitor.unl.edu/. By August—just two months later—USDA had completely reversed its outlook from one of abundance to one of shortage. USDA lowered its outlook for U.S. corn production to 10.8 billion bushels (a 27% drop of 4 billion bushels from its May forecast), corn price projections were raised sharply to $8.20 per bushel (up 78%), and stocks of feed grains and soybeans were forecast to approach historic low levels relative to demand by the end of the summer of 2013.8 Feed grain and oilseed prices moved well above their 2008 highs (Figure 8 and Figure 9). In addition to crop production shortfalls, the summer heat also took a severe toll on the U.S. livestock sector, as the lack of adequate rainfall over more than half of the country resulted in reduced availability of pasture and higher prices for corn and other feedstuffs. Drought-induced higher feed prices and heat stress on crops, pastures, livestock, and poultry restrained growth of U.S. cattle and hog breeding herd numbers as well as poultry and milk production. 7 8 Midpoint of a projected range of $4.20 to $5.00 per bushel, WASDE, WAOB, USDA, June 12, 2012. WASDE, WAOB, USDA, August 10, 2012. Congressional Research Service 6 U.S. Farm Income Figure 6. U.S. Corn Stocks (as Share of Use) to Grow in 2013/2014, While Prices Fall Source: WAOB, USDA, WASDE, August 12, 2013. Figure 7. U.S. Soybean Stocks (as Share of Use) Remain Near Historic Lows 35% Stocks-to-Use Ratio $/bushel $16.00 $14.00 30% $12.00 25% $10.00 20% $8.00 15% $6.00 10% $4.00 5.4% 4.6% 4.4% 5% 4.1% $2.00 $0.00 0% 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: WAOB, USDA, WASDE, August 12, 2013. Congressional Research Service 7 U.S. Farm Income Figure 8. Monthly Farm Prices for Corn, Soybeans, and Wheat, Nominal Dollars Source: USDA, National Agricultural Statistics Service (NASS), Agricultural Prices, July 31, 2013. Note: cwt = hundredweight or units of 100 lbs. Figure 9. Monthly Farm Prices for Corn, Soybeans, and Wheat, Indexed Dollars Source: USDA, NASS, Agricultural Prices, July 31, 2013. Notes: Prices are adjusted for inflation using the CPI (2002-2003 = 100) to permit relative comparisons. Congressional Research Service 8 U.S. Farm Income Figure 10. Monthly Farm Prices for Cotton and Rice, Nominal Dollars Source: USDA, NASS, Agricultural Prices, July 31, 2013. Notes: cwt = hundredweight or units of 100 lbs. Figure 11. Monthly Farm Prices for Cotton and Rice, Indexed Dollars Source: USDA, NASS, Agricultural Prices, July 31, 2013. Notes: Prices are adjusted for inflation using the CPI (2002-2003 = 100) to permit relative comparisons. Congressional Research Service 9 U.S. Farm Income Figure 12. Monthly Farm Prices for Cattle and Milk, Nominal Dollars Source: USDA, NASS, Agricultural Prices, July 31, 2013. Note: cwt = hundredweight or units of 100 lbs. Figure 13. Monthly Farm Prices for Cattle and Milk, Indexed Dollars Source: USDA, NASS, Agricultural Prices, July 31, 2013. Notes: Prices are adjusted for inflation using the CPI (2002-2003 = 100) to permit relative comparisons. Congressional Research Service 10 U.S. Farm Income Figure 14. Monthly Farm Prices for Hogs and Broilers, Nominal Dollars Source: USDA, NASS, Agricultural Prices, July 31, 2013. Note: cwt = hundredweight or units of 100 lbs. Figure 15. Monthly Farm Prices for Hogs and Broilers, Indexed Dollars Source: USDA, NASS, Agricultural Prices, July 31, 2013. Notes: Prices are adjusted for inflation using the CPI (2002-2003 = 100) to permit relative comparisons. Congressional Research Service 11 U.S. Farm Income Cash Receipt Highlights • Total farm sector gross cash receipts for 2013 are projected at $391 billion, down 1% from last year’s record (Figure 16 and Table 2). • Farm sector revenue sources and shares include crop revenues (51% of sector revenues), livestock receipts (39%), government payments (about 2%), and other farm-related income including crop insurance indemnities, machine hire, and custom work (8%). Figure 16. Farm Cash Receipts by Source, 1990 to 2013F Source: USDA, ERS, “2013 Farm Income Forecast,” August 27, 2013. Notes: 2013 is forecast. Receipts from crop and livestock product sales, and government payments, are described in more detail below. Farm-related income includes income from custom work, machine hire, agritourism, forest product sales, insurance indemnities, and cooperative patronage dividend fees. Crop Highlights Total crop sales—projected at $211 billion (down 5.5% from last year’s record)—are expected to account for 51% of total U.S. gross cash receipts in 2013 (Figure 16). The crop sector includes field crop sales (i.e., feed and food grains, oil crops, and cotton) of $146 billion (up 1.6%) and other crop receipts—that is, fruits and nuts, vegetables, and all other crops—of $70.4 billion (down slightly by 1.1%). Highlights include projections for: • a corn crop value of $60 billion, down 13% from last year’s record; • a total feed grain crop—corn, sorghum, barley, and oats—value of nearly $81 billion (down 10%); Congressional Research Service 12 U.S. Farm Income • a soybean crop valued at $38.1 billion, down 6% from last year’s record; • a total oil crop—soybeans, sunflowers, rapeseed, canola, and other minor oilseeds—valued at $41 billion (down nearly 8%); • a record hay crop value of nearly $8 billion (up 4%); • a near-record food crop—wheat and rice—value of $18 billion (down a 2% from 2012’s record); • a cotton crop valued at $6 billion (down over 28% from last year due to lower production); and • other crop receipts—fruits and nuts, vegetables, and all other crops—at a record $75.4 billion, up 17% from the previous year’s record. Figure 17. Crop Cash Receipts by Source, 2007 to 2013F Source: USDA, ERS, “2013 Farm Income Forecast,” August 27, 2013. Notes: 2012 is preliminary, 2013 is forecast. See Table 2 for details. Livestock Highlights The livestock sector, broadly defined, includes cattle, hogs, sheep, poultry and eggs, dairy, and other minor activities. The value of the total livestock sector is projected record-large in 2013 at $180 billion (up 5%). However, relatively high livestock product prices are expected to be offset at least in part by continuing high feed costs in 2013. Record-high cash receipts are projected for poultry, eggs, and dairy, while cattle cash receipts are projected near record large. Highlights for individual activities include projections for: Congressional Research Service 13 U.S. Farm Income • record broiler sales of $30 billion (up 21%); • record hog sales of $23 billion (up 4% from last year’s record); • record dairy sales, valued at nearly $40 billion; and • cattle and calf sales of over $67 billion (down 1%). Figure 18. U.S. Livestock Product Cash Receipts by Source, 2007 to 2013F Source: USDA, ERS, “2013 Farm Income Forecast,” August 27, 2013. Notes: 2012 is preliminary, 2013 is forecast. See Table 2 for details. Government Payment Highlights Government farm payments are projected up slightly in 2013 at $11.1 billion (up 4%). This would be the third-lowest outlay since 1997 as high commodity prices shut off payments under the price-contingent marketing loan and counter-cyclical payment programs (Figure 19). • Government payments are expected to represent a relatively small share (4%) of projected gross cash income of $440 billion. • In contrast, government payments represent 9% of net farm income of $120.8 billion; however, the importance of government payments as a percent of net farm income varies nationally by sector and region. • Farm fixed direct payments, whose payment rates are fixed in legislation and are not affected by the level of program crop prices, are forecast at $4.4 billion in 2013, down 6% from 2012 The decline is attributed both to a reduction in payments because of sequestration and the likelihood that more producers will exceed statutory limits on adjusted gross income. Congressional Research Service 14 U.S. Farm Income • Payments under the price-contingent marketing loan benefit and counter-cyclical payment (CCP) programs are expected to remain at $0 in 2013, as program crop prices are expected to remain above program payment triggers for all of 2013 (Table 7).9 Figure 19. U.S. Government Farm Support, Direct Outlays, 1997 to 2013F Source: USDA, ERS, “2013 Farm Income Forecast,” August 27, 2013. Notes: Data are on a fiscal year basis and may not correspond exactly with the crop or calendar year; 2012 is preliminary, 2013 is forecast. Direct payments include production flexibility contract payments enacted under the 1996 farm bill and fixed direct payments of the 2002 and 2008 farm bills; price-contingent outlays include loan deficiency payments, marketing loan gains, counter-cyclical payments and ACRE payments; conservation outlays include Conservation Reserve Program payments along with other conservation program outlays; Ad Hoc and Emergency includes emergency supplemental crop and livestock disaster payments and market loss assistance payments for relief of low commodity prices; and “all other” outlays include peanut quota buyout payments, milk income loss payments, tobacco transition payments, and other miscellaneous expenditures. 9 • Payments under the Average Crop Revenue (ACRE) program are forecast at $30 million in 2013, but covering final 2011-crop ACRE payments for rice and 2012crop ACRE payments for the other commodities. • Milk Income Loss Contract payments—which compensate dairy producers when domestic milk prices fall below a specified benchmark price subject to feed-cost adjustments—are forecast at $225 million. • Conservation programs include all conservation programs operated by USDA’s Farm Service Agency (FSA) and the Natural Resources Conservation Service See CRS Report RL34594, Farm Commodity Programs in the 2008 Farm Bill. Congressional Research Service 15 U.S. Farm Income (NRCS) that provide direct payments to producers. Estimated conservation payments of $3.8 billion in 2013, up 2% from 2012. • Supplemental and ad hoc disaster assistance payments are forecast at $2 billion in 2013, a 54% increase from 2012 levels.10 • Supplemental Revenue Assistance (SURE) payments are expected to amount to $870 billion in 2013 (up 54%) to cover crop-year 2011 losses.11 • Noninsured Assistance Program payments of $280 million are expected to be made to livestock and specialty crop producers for whom no commodity insurance program is available. • Note that disaster relief programs (SURE, LIP, LFP, ELAP, and TAP) under the extended 2008 farm bill only covered losses incurred prior to October 1, 2011.12 Thus, drought-related commodity and livestock losses for the 2012 crop year currently are not covered. Production Expense Highlights • Nearly every cost category—fertilizer, pesticides, fuel, feed, seed, etc., as well as most operating and overhead expenses—is projected at or near-record levels in 2013 (Figure 20 and Figure 3). • Total farm production expenses are forecast to rise to a record $354 billion in 2013, up 4% from 2012’s previous record (Table 3). • The year-over-year increase in expenses of $13 billion compares with essentially no change in gross cash receipts. In addition, a $10.5 billion increase in on-farm crop inventories accounts for a 10% decline in net cash income. • The increase in expenses will affect crop and livestock farms differently. The principal expenses for livestock farms (i.e., feed and feeder animals and poultry) are expected to increase by nearly $3 billion (+3%) to $85 billion, while the principal crop expenses (seed, fertilizer, pesticides, and crop insurance premiums) are expected to increase by $4 billion (+4%) to $102 billion. • The miscellaneous operating expenses category, which is projected up $3.5 billion (+10%) to $39 billion, includes crop insurance premiums and thus directly impacts crop production. 10 CRS Report RS21212, Agricultural Disaster Assistance. SURE payments are based on the average market-year price calculated after a crop year ends. The lag in calculating the average price coupled with a market-year spilling over two calendar years, results in the nearly two-year delay in SURE payments. See CRS Report R40452, A Whole-Farm Crop Disaster Program: Supplemental Revenue Assistance Payments (SURE). 12 The 2008 farm bill was extended through FY2013 by the American Taxpayer Relief Act of 2012 (P.L. 112-240). 11 Congressional Research Service 16 U.S. Farm Income Figure 20. Farm Cash Production Expenses by Source, 2007 to 2013F Source: USDA, ERS, “2013 Farm Income Forecast,” August 27, 2013. Notes: 2012 is preliminary, 2013 is forecast. See for Table 3 details. Agricultural Trade Outlook A major catalyst behind projections for stronger farm income is the strength of U.S. agricultural exports—forecast at a record $142 billion in 2013, up 3% from 2012 (Figure 21). • USDA projects that annual U.S. agricultural exports will decline slightly in 2014 to $135 billion. • U.S. agricultural imports were record-large in 2013 at $105 billion and are projected up another 8% to $113 billion in 2014. • The U.S. agricultural trade surplus is projected at a record $35 billion in 2013. However, the surge in imports in 2014 is projected to lower the trade surplus to $22 billion in 2014 (down 37%). • Much of the increase in U.S. agricultural exports since 2010 has been due to higher-priced grain and feed shipments plus record oilseed exports to China, and growing animal product exports to East Asia.13 13 USDA, ERS, Outlook for U.S. Agricultural Trade, AES-76, November 29, 2012. The U.S. agricultural trade outlook—released quarterly—is available at http://www.ers.usda.gov/Briefing/AgTrade/. Congressional Research Service 17 U.S. Farm Income Figure 21. U.S. Agricultural Trade Since 1970 Source: USDA, Outlook for U.S. Agricultural Trade, AES-79, August 29, 2013, ERS, USDA. Figure 22. U.S. Agricultural Trade: Bulk vs. High-Value Shares Source: USDA, Outlook for U.S. Agricultural Trade, AES-79, August 29, 2013, ERS, USDA. Congressional Research Service 18 U.S. Farm Income • Over the past four decades, steady growth in high-valued export products (Figure 22) has helped to push U.S. agricultural export value to ever higher totals. This pattern plateaued temporarily in 2006, when rapid growth in demand from both international commodity markets and domestic biofuels pushed prices for most bulk crops (especially feed grains and oilseeds) to record levels. • Bulk commodity shipments (primarily wheat, rice, feed grains, soybeans, cotton, and unmanufactured tobacco) are forecast at a record low 32% share of total U.S. agricultural exports in 2014, at $42.5 billion. • In contrast, high-valued export products—including horticultural, livestock, poultry, and dairy—are forecast to rise for a fourth consecutive year, to $92.4 billion in 2014. • As a share of total gross farm receipts, U.S. agricultural exports are projected to account for 29% of earnings in 2013 (Figure 23). Figure 23. U.S. Agricultural Export Value as Share of Gross Cash Income Source: USDA, Outlook for U.S. Agricultural Trade, AES-79, August 29, 2013, ERS, USDA. Farm Asset Values and Debt The U.S. farm income and asset-value situation and outlook suggest a strong financial position heading into the latter half of 2013 for the agriculture sector as a whole. • Farm asset values—which reflect farm investors’ and lenders’ expectations about long-term profitability of farm sector investments—are projected up over 7% in 2013 to $3,010 billion, reflecting a continued strong outlook in the general farm economy (Table 6). Congressional Research Service 19 U.S. Farm Income • Higher farm asset values are due primarily to stronger farm real estate values (Figure 24). After rebounding from a 2.8% decline during 2009—the first decline since 1987—farm real estate values have grown by an estimated 37% through 2013, due largely to strong crop prices. • This same pattern is reflected in both cropland and pastureland values (up 50% and 12%, respectively, since 2009). Land value growth is closely linked to commodity prices and could plateau or recede slightly if abundant crop harvests are realized in 2013. Figure 24. U.S. Average Farm Land Values, 1985 to 2013F Source: USDA, NASS, Land Values 2013 Summary, August 2013. Notes: 2013 is a forecast. Farm real estate value measures the value of all land and buildings on farms. Cropland and pasture values are only available since 1998. • Meanwhile, total farm debt is forecast to rise to $308 billion in 2013 (up 3% year-to-year). • As a result of the relative improvement between farm asset values and farm debt, farm equity (or net worth, defined as asset value minus debt) is projected recordhigh in 2013, at $2,702 billion. • The farm debt-to-asset ratio had been steadily declining since 1985’s peak value of 23%—except for a one-year reversal in 2008, to a projected historic low of 10.2% in 2013 (Figure 25). Congressional Research Service 20 U.S. Farm Income Figure 25. U.S. Farm Debt-to-Asset Ratio Since 1960 Source: USDA, ERS, “2013 Farm Income Forecast,” August 29, 2013. Note: 2012 is preliminary, 2013 is forecast. Average Farm Household Income On-Farm vs. Off-Farm Income Shares • Average farm household income (the sum of both on- and off-farm income) is projected to decline slightly in 2013 after three consecutive years of growth, falling 4% to $104,525 (Table 5). • The share of farm income derived from off-farm sources has increased steadily in recent decades and appears to have peaked at about 95% in 2002. • In 2013, off-farm income sources are forecasted to account for about 85% of the national average farm household income, compared with about 15% from farming activities (Figure 26). U.S. vs. Farm Household Income • Over the past decade, farm household incomes have surged ahead of average U.S. household incomes (Figure 27 and Figure 28). • In 2011 (the last year for which comparable data were available), the average farm household income of $87,278 was about 25% higher than the average U.S. household income of $69,677 (Table 5). Congressional Research Service 21 U.S. Farm Income Figure 26. U.S. Average Farm Household Income, On- and Off-Farm Sources, Since 1960 Source: USDA, ERS, “Farm Household Economics and Well-Being: Historic Data On Farm Operator Household Income,” August 27, 2013. Figure 27. Comparison of Farm to U.S. Average Household Income Since 1960 Source: USDA, ERS, “2013 Farm Income Forecast,” August 27, 2013. Note: 2012 is preliminary, 2013 is forecast. Congressional Research Service 22 U.S. Farm Income Figure 28. Ratio of Farm to U.S. Average Household Income Since 1960 150% 125% 100% 75% Ratio of Farm to U.S. Average Household Income 50% 1960 1970 1980 1990 2000 2010 Source: See above source note. 2011 is the last year with comparable data. Farm Household Income by Sales Class The share of income from farming increases with farm size as measured by gross sales (Table 1). • “Large” commercial farm households (farms with annual sales greater than $250,000) obtained nearly 75% of household income on-farm and accounted for 82% of the value of total U.S. agricultural production in 2011, while representing only about 10% of farm households.14 • Intermediate family farms (farms with annual sales in excess of $10,000 but less than $250,000) obtained about 10% of household income from on-farm sources, accounted for about 17% of the value of total U.S. agricultural production, and represented about 30% of family farms. • “Small” farm households (annual sales less than $10,000) actually lost revenue from farming operations (-9% of household income) and accounted for slightly more than 1% of the value of total U.S. agricultural production in 2011, while representing 59% of farm households. A substantial number of these small farms are classified as rural residence farms and either receive little or no income from farm sources or have a total income level that qualifies them as limited-resource farms. 14 For more information on farm typology, see the ERS Briefing Room, Farm Household Well-Being, at http://www.ers.usda.gov/topics/farm-economy/farm-household-well-being.aspx. Congressional Research Service 23 U.S. Farm Income Table 1. Distribution of Farms and Value of Production by Gross Farm Sales, 2011 Family Farms Value of Gross Sales Total U.S. Production On-farm Share Off-farm Share 1.2% -9% 109% $70,507 30% 16.5% 10% 90% $79,780 219,422 10% 82.3% 75% 25% $205,215 2,114,668 100% 100.0% 17% 83% $87,289 Share Share 1,255,816 59% $10,000 to $249,999 639,430 > $250,000 < $10,000 All Total HH Income (Mean) Number Total Value Source: USDA, ERS, Farm Income and Wealth Statistics; U.S. and State Farm Income and Wealth Statistics, updated as of November 27, 2012; available at http://www.ers.usda.gov/data-products/farm-income-and-wealthstatistics.aspx. Congressional Research Service 24 U.S. Farm Income Table 2. U.S. Crop and Livestock Revenue by Source, 2008-2013F ($ billions) 2008 2009 2010 2011 2012a 2013a Change (%) Field crops 110.9 104.8 112.9 131.8 150.1 135.7 -9.6% Food grains 18.7 14.8 14.1 16.8 18.1 17.8 -2.1% Wheat 15.4 11.7 11.1 13.9 15.3 15.0 -1.8% Rice 3.2 3.0 3.0 2.9 2.8 2.7 -3.2% Feed crops 58.4 50.5 54.8 72.0 79.1 70.8 -10.4% Corn 48.4 42.5 47.2 62.9 69.2 60.4 -12.7% Other Grains 2.7 2.4 2.3 2.1 2.6 2.8 9.5% Hay 7.4 5.6 5.3 7.0 7.3 7.6 4.2% Oil Crops 28.6 35.6 36.5 35.6 44.3 40.9 -7.6% Soybeans 26.4 33.7 34.5 33.3 40.7 38.2 -6.2% Peanuts 1.2 0.8 0.9 1.2 2.3 1.4 -37.8% Cotton (lint & seed) 5.2 4.0 7.6 7.4 8.6 6.1 -28.4% Other Crops 63.8 64.0 66.6 70.2 73.3 75.4 2.8% Fruits and nuts 19.0 19.3 21.7 24.4 26.1 24.0 -8.0% Vegetables 19.9 20.4 20.2 20.7 20.6 24.2 17.4% All other crops 24.9 24.3 24.6 25.0 26.6 27.2 2.2% Total Crops 174.7 168.8 179.5 202.0 223.4 211.1 -5.5% Meat animals 65.0 59.0 69.5 84.7 90.1 90.3 0.2% Cattle & calves 48.5 43.8 51.5 63.0 67.9 67.2 -1.0% Hogs 16.1 14.7 18.0 21.8 22.2 23.1 4.0% Sheep & lambs 0.4 0.4 0.4 0.4 0.4 0.4 0.0 Poultry and eggs 36.8 32.5 35.5 36.2 39.0 44.5 14.0% Broilers 23.2 21.8 23.7 23.0 24.8 30.1 21.4% Turkeys 4.5 3.6 4.4 5.0 5.4 5.0 -7.3% Eggs 8.2 6.1 6.5 7.3 7.8 8.2 5.3% All dairy 34.8 24.3 31.4 39.5 37.0 39.8 7.5% Other livestock 5.0 4.5 5.1 5.5 5.4 5.5 1.2% Total Livestock 141.6 120.3 141.4 165.9 171.6 180.1 4.9% Government payments 12.2 12.2 12.4 10.4 10.6 11.1 4.4% Other farm incomeb 21.5 22.0 18.3 26.1 33.6 36.9 9.9% Total Farm Revenue 350.1 323.3 351.6 404.4 439.2 439.2 0.0% Item Source: “USDA, ERS, Farm Income and Wealth Statistics; updated as of August 27, 2013. na=not available. a. Forecast. Change represents year-to-year change between 2012 and 2013. b. Machine hire, custom work, forest products sales, insurance indemnities, and other farm income. Congressional Research Service 25 U.S. Farm Income Table 3. U.S. Farm Production Expenses by Source, 2008-2013F ($ billions) 2008 2009 2010 2011 2012a 2013a Change (%) Farm origin inputsb 79.8 77.3 81.4 94.2 102.9 106.4 3.5% Feed 46.9 45.0 45.4 54.6 59.1 61.3 3.6% Livestock 17.7 16.7 19.6 21.7 23.4 23.9 1.8% Seed 15.1 15.5 16.3 17.8 20.3 21.3 4.9% Manufactured inputsc 55.0 49.0 49.6 57.5 63.2 63.2 -0.1% Fertilizer & lime 22.5 20.1 21.0 25.1 28.5 28.2 -1.3% Fuels & oils 16.2 12.7 13.2 15.6 15.5 15.5 -1.2% Electricity 4.5 4.6 4.6 4.9 5.6 5.6 6.7% Pesticides 11.7 11.5 10.7 11.8 13.7 13.9 1.3% Total interest charges 15.4 17.6 16.9 16.0 16.1 16.6 2.9% Short-term interest 6.6 7.5 6.8 5.9 6.0 6.5 9.8% Real-estate interest 8.8 10.1 10.0 10.2 10.1 10.0 -1.2% Other operating exp.d 93.4 88.8 85.5 88.9 97.7 105.3 7.7% Repair & maintenance 14.8 14.7 14.8 15.5 16.6 17.2 3.7% Hired & contract labor 30.0 28.9 27.4 26.8 31.0 33.1 6.9% Custom work 4.1 3.9 4.3 4.0 4.8 4.9 2.1% Marketing, storage, etc. 10.1 10.3 10.3 10.2 10.1 11.3 11.7% Miscellaneous 34.3 31.0 28.7 32.5 35.3 38.8 10.0% 49.0 50.3 54.1 55.9 61.2 62.8 2.5% Capital consumption 28.7 30.1 30.7 32.1 34.2 33.7 -1.3% Property taxes 10.7 10.4 10.8 11.3 11.5 12.2 6.0% Non-operator net rent 9.6 9.8 12.6 12.5 15.5 16.8 8.5% 292.6 283.0 287.5 312.5 341.1 354.2 3.8% Item Overhead expensese Total Production Exp. Source: USDA, ERS, Farm Income and Wealth Statistics; updated as of August 27, 2013; available at http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx. a. Forecast. Change represents year-to-year change between 2012 and 2013. b. Farm origin inputs include purchases of feed, livestock and poultry, and seed. c. Manufactured inputs include fertilizers and lime, pesticides, petroleum fuel and oils, and electricity. d. Other operating costs include repair and maintenance of capital items, machine hire and custom work, marketing storage, transportation expenses, and other miscellaneous expenses. e. Overhead expenses include property taxes, net rent to a non-operator landlord, and capital consumption. Congressional Research Service 26 Table 4. Annual U.S. Farm Income Since 2006 ($ billions) Item 2006 2007 2008 2009 2010 2011 2012a 2013a Change (%) 1. Cash receipts 240.6 288.5 316.3 289.1 320.9 367.9 395.0 391.1 -1.0% Cropsb Livestock 2. Government paymentsc 122.1 118.5 150.1 138.5 174.8 141.6 15.8 11.9 12.2 168.8 120.3 12.2 179.5 141.4 12.4 202.0 165.9 10.4 223.4 171.6 10.6 211.1 180.1 11.1 -5.5% 4.9% 4.4% Fixed direct CCPe Marketing Loan Benefitsf Conservation Ad hoc and emergency All otherg 3. Farm-related incomeh 5.1 4.0 1.8 3.0 0.3 1.7 16.8 5.1 1.1 1.1 3.1 0.5 1.0 17.6 5.1 0.7 0.3 3.2 2.1 0.8 21.5 4.7 1.2 1.1 2.8 0.6 1.7 22.0 4.8 0.2 0.1 3.5 3.1 0.7 18.3 4.7 0.0 0.0 3.7 1.3 0.7 26.1 4.7 0.0 0.0 3.7 1.1 1.1 33.6 4.4 0.0 0.0 3.8 2.0 0.9 36.9 -6.3% 0.0% 0.0% 2.4% 83.6% -21.0% 9.9% 4. Gross cash income (1+2+3) 5. Cash expensesi 6. NET CASH INCOME 273.2 204.8 68.4 318.0 240.6 77.4 350.1 261.1 88.9 323.2 249.4 73.8 351.6 254.0 97.6 404.4 277.8 126.6 439.2 305.0 134.2 439.2 318.4 120.8 0.0% 4.4% -10.0% 7. Total gross revenuesj 8. Total production expensesk 9. NET FARM INCOME 290.2 232.7 57.4 339.6 269.5 70.0 377.9 292.6 85.0 343.3 283.0 60.3 365.4 287.5 78.0 430.5 312.5 118.0 454.9 341.1 113.8 474.7 354.2 120.6 4.4% 3.8% 6.0% paymentsd Source: USDA, ERS, Farm Income and Wealth Statistics; U.S. and State Farm Income and Wealth Statistics, updated as of August 27, 2013. a. Data for 2013 are USDA forecasts. Change represents year-to-year change between 2012 and 2013. b. Includes Commodity Credit Corporation loans under the farm commodity support program. c. Government payments reflect payments made directly to all recipients in the farm sector, including landlords. The non-operator landlords’ share is offset by its inclusion in rental expenses paid to these landlords and thus is not reflected in net farm income or net cash income. For more information on U.S. farm commodity programs, see CRS Report RL34594, Farm Commodity Programs in the 2008 Farm Bill; for more information on conservation programs see CRS Report RL34557, Conservation Provisions of the 2008 Farm Bill. d. Direct payments include production flexibility payments of the 1996 Farm Act through 2001, and fixed direct payments under the 2002 Farm Act since 2002. e. CCP = counter-cyclical payments. f. Includes loan deficiency payments (LDP); marketing loan gains (MLG); and commodity certificate exchange gains. g. Peanut quota buyout, milk income loss payments, and other miscellaneous program payments. h. Income from custom work, machine hire, agri-tourism, forest product sales, and other farm sources. i. Excludes depreciation and perquisites to hired labor. j. Gross cash income plus inventory adjustments, the value of home consumption, and the imputed rental value of operator dwellings. k. Cash expenses plus depreciation and perquisites to hired labor. CRS-27 Table 5. Average Annual Income per U.S. Household, Farm versus All, 2006-2013F ($ per household) 2006 2007 2008 2009 2010 2011F 2012F 2013F Average U.S. Farm Income by Source On-Farm Income $8,541 $11,364 $9,764 $6,866 $11,788 $14,623 $22,081 $16,126 Off-Farm income $72,502 $77,432 $70,032 $70,302 $72,671 $72,655 $86,723 $88,399 Total Farm income $81,043 $88,796 $79,796 $77,169 $84,459 $87,278 $108,804 $104,525 Average U.S. Household Income Farm Household Income as Share of U.S. Avg. Household Income (%) $66,570 $67,609 $68,424 $67,976 $67,530 $69,677 na na 122% 131% 117% 114% 125% 125% na na Source: USDA, ERS, Farm Household Income and Characteristics, principal farm operator household finances, data set updated as of August 27, 2013; at http://www.ers.usda.gov/data-products/farm-household-income-and-characteristics.aspx. Note: Data for 2012 and 2013 are USDA forecasts. Table 6. Average Annual Farm Sector Debt-to-Asset Ratio, 2006-2013F ($ billions) 2006 2007 2008 2009 2010 2011F 2012F 2013F Farm Assets 1,923.6 2,055.3 2,023.3 2,139.9 2,358.5 2,529.8 2,811.3 3,010.3 Farm Debt 203.6 214.1 241.6 268.3 278.9 294.5 300.3 308.3 Farm Equity 1,720.0 1,841.2 1,781.7 1,871.5 2,079.5 2,235.4 2,510.9 2,701.9 Debt-to-Asset Ratio (%) 10.6% 10.4% 11.9% 12.5% 11.8% 11.6% 10.7% 10.2% Source: USDA, ERS, Farm Income and Wealth Statistics; U.S. and State Farm Income and Wealth Statistics, updated as of August 27, 2013; available at http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx. Note: Data for 2012 are preliminary, 2013 are USDA forecasts. CRS-28 Table 7. U.S. Prices and Support Rates for Selected Farm Commodities Since 2008/09 Marketing Year Commoditya Unit Year 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14Fb % change from 2012/13c 2014/15Pb % change from 2013/14d 2013 Loan Ratee 2013 Target Price Wheat $/bu Jun-May 6.78 4.87 5.70 7.24 7.77 6.40-7.60 -9.9% — — 2.75 3.92 Corn $/bu Sep-Aug 4.06 3.55 5.18 6.22 6.90-7.00 4.50-5.30 -29.5% — 1.95 2.63 Sorghum $/bu Sep-Aug 3.20 3.22 5.02 5.99 6.50-6.70 4.20-5.00 -30.3% — 1.95 2.57 Barley $/bu Jun-May 5.37 4.66 3.86 5.35 6.43 5.40-6.40 -8.2% — 1.85 2.44 Oats $/bu Jun-May 3.15 2.02 2.52 3.49 3.89 2.90-3.50 -17.7% 1.33 1.44 Rice $/cwt Aug-Jul 16.80 14.40 12.70 14.50 14.90 14.50-15.50 0.7% 6.50 10.50 Soybeans $/bu Sep-Aug 9.97 9.59 11.30 12.50 14.40 10.35-12.35 -21.4% 5.00 5.80 Soybean oil ¢/lb Oct-Sep 32.16 35.95 53.20 51.90 47.00 44.0-48.0 -2.1% — — Soybean meal $/st Oct-Sep 331.2 311.27 345.52 393.53 455.00 305-345 -28.6% — — — — — — — Cotton, Upland ¢/lb Aug-Jul 47.8 62.9 81.50 88.3 72.0 72-88 11.1% — — — — — — — — — — 52.00 71.25 Choice Steers $/cwt Jan-Dec 92.27 83.25 95.38 114.73 122.86 123-126 1.3% 126-136 5.2% — — Barrows/Gilts $/cwt Jan-Dec 47.84 41.24 55.06 66.11 60.88 62-64 3.5% 58-62 -4.8% — — Broilers ¢/lb Jan-Dec 79.7 77.60 82.90 79.0 86.6 100-103 17.2% 89-97 -8.4% — — Eggs ¢/doz Jan-Dec 128.3 103.0 106.30 115.3 117.4 117-120 0.9% 107-116 -5.9% — — Milk $/cwt Jan-Dec 18.29 12.83 16.26 20.14 18.53 19.60-19.80 6.3% 18.65-19.65 -2.8% — — Source: Various USDA agency sources as described in the notes below. a. Season average farm price for grains and oilseeds are from USDA, National Agricultural Statistical Service, Agricultural Prices. Calendar year data are for the first year, for example, 2000/2001 = 2000; F = forecast and P = projection from World Agricultural Supply and Demand Estimates (WASDE) August 12, 2013;—= no value; and USDA’s out-year 2014/2015 crop price forecasts will first appear in the May 2014 WASDE report. Soybean and livestock product prices are from USDA, Agricultural Marketing Service (AMS): soybean oil—Decatur, IL, cash price, simple avg. crude; soybean meal—Decatur, IL, cash price, simple avg. 48% protein; choice steers— Nebraska, direct 1100-1300 lbs.; barrows/gilts—national base, live equivalent 51%-52% lean; broilers—wholesale, 12-city avg.; eggs—Grade A, New York, volume buyers; and milk—simple avg. of prices received by farmers for all milk. b. Data for 2013/2014 are USDA forecasts; 2014/2015 data are USDA projections. c. Percent change from 2011/2012, calculated using the difference from the midpoint of the range for 2012/2013 with the estimate for 2011/2012. d. Percent change from 2012/2013, calculated using the difference from the midpoint of the range for 2013/2014 with the estimate for 2012/2013. e. Loan rate and target prices are for the 2012/2013 crop year. For more information, see CRS Report RL34594, Farm Commodity Programs in the 2008 Farm Bill. CRS-29 U.S. Farm Income Author Contact Information Randy Schnepf Specialist in Agricultural Policy rschnepf@crs.loc.gov, 7-4277 Congressional Research Service 30