2010 and 2011 were some of the most profitable years in the history of American farming. While farmers aren’t expecting the same record highs, they are expecting the good times to continue.
Over the last five years, American farmers have enjoyed continued, rising prices. The high prices are largely the result of increased demand. Major commodities have seen rapidly expanding domestic and international demand over the past several years, Corn in particular, due to increased ethanol production, has become a popular crop.
Last year farm incomes reached over $98 billion, an increase of 24 percent since 2010.
While economists are tamping down expectations, many predict that prices will remain high. Given that demand is remaining stable, some farmers are confident that even an expected increase in corn and commodity production won’t significantly reduce crop prices and farm incomes. Others are more pessimistic, stating that grain markets are already softening up due to expected production.
Some threats to farm incomes are unpredictable weather patterns. An incoming cold spell could threaten crops across the Midwest. The cold spell is only exacerbating problems caused by unusually warm winter weather. Finally, increasing gas prices could limit farm incomes and reduce farmers’ profitability.
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Written by: Justin Ellison / Farm Plus Staff Writer