Floyd Gaibler, USDA under secretary, Farm and Foreign Agriculture Services, says agriculture has enjoyed an unprecedented period of prosperity over the past five years.
“Virtually all agricultural sectors have prospered,” Gaibler said during an address at the recent USA Rice Outlook Conference in Orlando.
He said estimates indicate record cash receipts for the fifth straight year. Net farm income, based on USDA Nov. 29 estimates, is set at $87.5 billion, up $20.9 billion from the February 2007 figure and up $28.5 billion from 2006.
Estimated crop and livestock values are also set at record highs, $148.5 billion for crops and $140 billion for livestock.
Prospects look good for 2008, as well, Gaibler said, in spite of rising production costs, estimated to increase for the fifth straight year.
Production cost increases come mainly from a 22 percent rise in fuel costs and a significant jump in fertilizer and materials. “Most expenses are at an all-time high,” he said.
Even with higher costs, farmers are making gains.
“Debt to asset ratio is at 10 percent and (farm) net worth is at $2 trillion. We've seen a 60 percent increase in equity.”
Foreign sales are helping the bottom line.
“Exports are growing and are at a record level, spurred by the rising middle class in developing countries,” Gaibler said. Estimates indicate a $91 billion export market for 2008. “That's a $22.5 billion increase in two years.”
He said a strong global demand for grains four out of the last five years “has outpaced production.”
Tight rice stocks have pushed prices. “We have the lowest stocks since 1983,” Gaibler said. “Declining stocks in the United States and in global markets support the price. Some countries are buying ahead to protect against higher prices later in the year.”