TAMPA, Fla. – U.S. secretary of agriculture Tom Vilsack delivered the good news first.
“This is going to be a good year overall for farm country,” he told delegates attending the main session of the 2011 Commodity Classic conference.
His department is forecasting $94.7 billion in net farm income, a 20 percent increase over last year, which was up 34 percent from the previous year.
It will be the second highest inflation adjusted farm income in the last three decades.
“That’s certainly good news,” said Vilsack.
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Crops yielded above average across the Prairies this year, and quality is generally average to above-average.
Crop receipts are expected to be up 14 percent to $24.1 billion, led by corn, cotton, soybeans and wheat.
In two short years, the U.S. farm economy will have rebuilt the equity it lost in the economic downturn. The real value of farm assets is expected to be in excess of $2 trillion by the end of this year.
“We’ve basically recouped all of what we lost in 2009,” he said.
Vilsack encouraged farmers to consider purchasing equipment this year because a new program allows them to expense 100 percent of a tractor, combine or seeder in a single year.
Agriculture exports are projected to reach $135.5 billion in 2011, up $20 billion over last year’s levels.
“It will be a record year,” he said. Every $1 billion in exports generates an additional $1.4 billion in economic activity and supports 8,000 jobs.
The department has a mandate to increase trade with a focus on countries where there are increasing middle classes.
China is the best example of the kind of market being targeted.
“We now can say without any question that China is our number one customer. They surpassed Canada in 2010,” he said.
Vilsack saved the bad news for the tail end of his speech. He told growers they’ll be facing an uphill battle maintaining the level of support they have in the 2008 farm bill.
“We’re going to have a very interesting conversation about the farm bill if for no other reason than we do have to get serious about the deficit.”
