According to the latest reports, Oregon’s net farm income for 2010 rose slightly, the first increase the state has seen in several years. Net farm income is calculated by looking at a farmer’s profits once all business related expenses have been paid. It is out of this income that American farmers meet their everyday living expenses and is a major indicator of the overall health of the agricultural sector.
In this light, Oregon’s net income increase is good news for an industry that has seen several years of economic downturn. In 2003, Oregon farm net incomes topped $1 billion for the first time in their history, after decades of spotty growth. By 2007, however, farm incomes began to drop and by 2009 they had fallen to $422 million, their lowest in almost a decade.
The drop in farm incomes was caused by two factors, increased expenses and decreased value of farm goods. Increased farm expenses, mostly in the form of rising gas prices, have hit farmers across the country and have significantly cut into farm profits. In addition, the increased cost of wheat and animal feed hit many farmers hard and forced some to liquidate herds. Finally, the near collapse of the state’s nursery industry helped to lower overall farm incomes.
The recent drop in gas prices appears to have helped Oregon farmers significantly. This, combined with cutting costs across the state, increased emphasis on efficiency, and support from the state and federal government have helped increase net farm incomes and have helped stabilize the state’s agricultural sector.
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Written by: Justin Ellison / Farm Plus Staff Writer