According to recent reports by the U.S. Department of Agriculture, farm incomes across the country have risen significantly. The total U.S. farm income, the USDA predicts, will jump by 31 percent by the end of the year, increasing to nearly $104 billion. That figure is up $25 billion from 2010.
Crops ranging from corn, wheat, cotton, and soybeans all report significant price increases. These increases are also stimulating related industries. Companies that provide farm products, like fertilizer companies or farm machinery companies, have seen their profits increase in the wake of increased demand. In addition, farmland values are on the rise.
The increase in farm incomes raises important questions about agricultural production in the United States. On the one hand, the rise in incomes seems to show a vibrant industry, still capable of generating significant profits and playing a vital role in the larger American economy.
However, the increase in farm incomes can be deceiving. While crop prices and land value is on the rise, farm costs have been steadily increasing over the past several years. Overall farm expenses, particularly fuel and animal feed, are expected to rise by over $30 billion. The high cost of fuel in particular has been a major obstacle to farmers across the country.
The danger in these reports is that the general public may believe that farmers no longer need federal aid. Over the past several months, the agricultural sector has been on the receiving end of several budget cuts. Popular farm programs are in danger of being defunded and many Americans are questioning the need for further farm subsidies.
Despite increased crop prices, farmers are still in need of federal support. The increasing cost of farm maintenance aside, the recent string of catastrophic weather demonstrates how precarious the agricultural industry can be at times. Only through a well funded farm sector can the country experience the economic growth that it needs.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer