KENTUCKY’S farm economy did exceptionally well in 2011, with farm cash receipts expected to exceed $5 billion for the first time, up from $4.4 billion in 2010, according to estimates from the University of Kentucky College of Agriculture.
Official U.S. Department of Agriculture 2011 cash receipts won’t be released until summer 2012, but UK Extension Professor Will Snell said UK economists are seeing improvement in returns in corn, soybeans, wheat, cattle, horses, hogs and dairy. Net farm income is expected to rebound to above $1 billion in 2011, compared to $780 million in 2010.
Growth was seen across the nation despite a severe drought in some areas of the country. The USDA projects U.S. net farm income will reach a record high of $100.9 billion, up 28 percent over 2010 and 50 percent higher than the 10-year average.
UK economists said the force behind the improved financial returns in agriculture is the boom in exports over the past two years and the strong demand for grains for biofuel production.
“U.S. farm exports plunged in 2009, but then jumped to $109 billion last year,” Snell said. “Ag exports rebounded to a record $137 billion in 2011. It’s not so much that the volume of exports has been impressive; it’s that prices have soared.”
For the first time, Kentucky’s forest industry was included in the economic outlook. Jeff Stringer, extension professor in hardwood silviculture and forest operations, said theforestry sector continued to face challenges because of the economic downturn. Since 2008, the state has lost 9 percent of its wood industries, and the sector employs 21.6 percent fewer Kentuckians. Stringer predicted the forestry industry will continue to be tied to domestic housing in 2012, but overseas markets provide more opportunity for market expansions.
The economists were also optimistic that with reasonable weather, continued economic recovery and strong export markets, 2012’s farm cash receipts could set another record high, topping out between $5.3 and $5.7 billion.