Livestock producers seen to lead US agriculture recovery
Livestock producers will lead a recovery in US agriculture over the next two years as the broader economy improves and demand for beef, pork and dairy products increases, University of Missouri researchers said.
Net farm income in 2010 is expected to jump 18% from 2009, to US$66.5 billion, mainly due to higher livestock prices, the Food and Agricultural Policy Research Institute (FAPRI) said.
FAPRI co-director Pat Westhoff said, ''Higher incomes increase the demand for food, feed, fibre and fuel, supporting farm commodity prices.''
Farm income last year plunged US$30.7 billion, or 35%, from US$87.1 billion in 2008 as a slumping global economy sent crop and livestock prices tumbling. The nation's farmers, ranchers and dairy producers still have a deep hole to dig out of after the 2009 downturn prompted widespread herd reductions.
According to Westhoff, the recovery would mark a major change in direction for the farm economy after a dismal 2009, but 2010 farm income recovers only a third of the ground lost in 2009.
Net farm income totaling US$56.4 billion in 2009 was the lowest since 2002. In 2011, net farm income is projected to expand another 5%, to US$69.9 billion, and rise 7.4% in 2012, FAPRI said.
Even with improved profits and an outlook for expanding calf crops starting in 2013, beef supplies are not expected to turn up until 2014, Brown said.
US milk prices are expected to climb as the global dairy market recovers from last year's slump, Brown said. The US average ''all-milk'' price is projected to rise by a third, or about US$4, from US$12 per hundred pounds in 2009, the researchers said.
Corn prices, while down from a 2008 peak, will likely remain underpinned as growing demand from the ethanol industry consumes a larger portion of the US crop, Westhoff said.
The farm price for corn is expected to average about US$3.72 a bushel during the 2010-11 marketing year, up from US$3.60 in 2009-10, today's report said. US planted acreage is expected to increase to 89.6 million acres, up 3.6% from 86.5 million a year ago.
