LOUISVILLE, Ky. (AP) -- Kentucky's corn crop wilted from drought and triple-digit heat but overall farm income still thrived, according to agricultural economists who predicted record farm cash receipts in 2012 thanks to robust commodity prices and crop insurance payments.
Annual farm cash receipts across Kentucky are on pace to surpass $5 billion for the first time ever in the Bluegrass state, University of Kentucky agricultural economist Will Snell said Thursday. Last year's cash receipts came in just under $5 billion.
Profits on the farm also appeared to withstand this year's drought. Net farm income — the amount left after expenses — is expected to finish near the top end of the $1 billion to $1.5 billion-range that's typical for the state, Snell said.
That's well off the state's record net farm income of $2.1 billion in 2005. That was the first year burley tobacco farmers received payments in exchange for giving up production allotments under the now-defunct tobacco program.
The drought that stretched from spring into summer caused havoc for farmers, especially in raising corn, a leading Kentucky commodity.
The average statewide yield was a measly 68 bushels per acre, down by 71 bushels from a year ago, according to a recent report from the National Agricultural Statistics Service's field office in Kentucky.
Those dismal yields will be offset by especially high prices and infusions of insurance payments to help farmers withstand crop losses. Insurance payments are expected in the range of $200 million to $250 million statewide for corn losses, said Cory Walters, a UK grains expert.
Kentucky Agriculture Commissioner James Comer, a farmer himself, told reporters later that many grain farmers were rescued by a combination of timely rains that started in July and the high grain prices.
"If your yield's less but you're getting twice as much for the crop, then it kind of offsets," he said. "And that's what happened in agriculture. The high commodity prices carried the grain farmers that planted early across the line."
Thanks to high prices for soybean, central Kentucky farmer Garland Jones said he made a profit on his bean crop, even though he had to plant a second time after the first crop never emerged because of the drought.
The crop eventually produced average yields of 28 bushels an acre — not as good as he'd like but he wasn't complaining.
"For 28 bushels and July planting, I'm tickled," he said. "I kind of hit the rains just right."
Jones said he's also reaping the highest prices for his burley that he's gotten since the 2004 tobacco buyout. He's sold about half of his crop so far for an average price of about $2.02 per pound.
The Kentucky farm economy's resilience from drought was also a testament to its diversity.
While corn never recovered from the drought, other crops such as soybeans and tobacco rebounded with late-summer rains. Livestock prices remain relatively strong and the state's renowned equine industry is showing signs of stability.
Kentucky horse receipts rallied in 2011, reaching $800 million but still below the $1 billion levels in 2006-08. Equine sales were steady during 2012 and prices were generally improved, said Kenny Burdine, a UK livestock expert.
The one farm sector that's struggling is dairy, Snell said.
Strong U.S. farm exports also boosted agriculture in Kentucky, where exports account for nearly half the state's total agricultural production. That makes Kentucky the fifth-most trade dependent state in terms of agriculture, Snell said.
Meanwhile, the UK economists are forecasting even higher ag cash receipts in 2013 — in the range of $5.4 to $5.6 billion. The upbeat projection is pegged to predictions of relatively strong commodity prices and global demand.
The team of UK ag economists assessed the health of Kentucky agriculture during a presentation that coincided with the annual Kentucky Farm Bureau convention.