Year-end estimates for 2011 seem to reaffirm that farm profits have reached record highs. According to U.S. Department of Agriculture estimates, farm profits are expected to rise nearly 30 percent to over $100 billion. In addition, the USDA estimates that farmers will have about $100 billion cash on hand to pay bills, a first in agricultural history.
The causes of these remarkable profits are primarily increased demand for staple crops like corn and soybeans. Increased demand from overseas buyers, such as rapidly developing China and India, has caused crop prices to skyrocket. In addition, increased demand for corn due to recent increases in ethanol production has further fueled this rapid growth.
That’s not to say that the picture remains rosy for everyone. Many farmers across the country are still recovering from a seemingly unending string of poor weather, which has brought some farmers to the brink of bankruptcy. In addition, American consumers are grumbling at the farm profits, largely due to increased food prices they are experiencing at grocery stores.
Finally, these record profits could serve as a double-edged sword, simultaneously enriching farmers while undermining public support for federally funded farm programs. In the midst of an austerity fever sweeping Congress, agricultural spending has been a frequent target of politicians looking to reduce the deficit. High farm profit only serves to fuel, however unjustly, efforts to defund vital farm subsidies.
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Written by: Justin Ellison / Farm Plus Staff Writer