this is a copy/paste from feb 11 wall street journal article. don
CHICAGO—Federal forecasters expect U.S. farm income to climb this year to its highest level in 40 years as crop production rebounds from a deep drought and prices farmers fetch for livestock and poultry rise.
The Department of Agriculture projected in a report Monday that net farm income in the U.S. will reach $128.2 billion in 2013—the highest since 1973 when adjusted for inflation and the highest on record on a non-adjusted basis.
The rosier outlook is driven by expectations farmers will grow more corn and soybeans after last year's drought. Analysts predict increases in production will more than offset any price declines and rising costs, with the agency seeing corn stockpiles rising by more than 2 billion bushels.
The forecast also reflects a continued boom in the farm belt initially fueled by rising global demand for grains and increased mandates for corn-based ethanol.
"American agriculture continues to endure an historic drought with tremendous resolve," Agriculture Secretary Tom Vilsack said.
A severe drought in much of the U.S. farm belt last year—by some estimates the worst for more than five decades—resulted in a poor harvest that drove up prices for corn and soybeans further, though the weak harvest had a limited impact on farmers' incomes because of widespread use of government-backed crop-insurance programs.
The USDA's report Monday estimated farm income last year at $112.8 billion, down around 1% from its November estimate, and below the level in 2011, but still above historical averages.
The USDA's forecast for 2013 is based on historical yield averages and doesn't take into account current weather conditions. Parts of the Midwest, such as Indiana and Illinois, have seen a return in moisture, but much of the Great Plains, including Nebraska and Kansas, remain in drought.
"If we don't get some above-normal rainfall through the next few months, we are going to enter the [growing] season very, very dry," said Steve Nelson, president of the Nebraska Farm Bureau, who grows corn and soybeans in the south central part of the state.
Livestock producers have been particularly hard hit by the drought as feed costs have risen sharply and pastures used for grazing dried up. Those producers over the coming year should benefit from higher prices as supplies tighten. The USDA expects a 3.5% jump in the value of livestock, dairy and poultry production from a year ago.