U.S., Kentucky agriculture doing better than expected
LEXINGTON, Ky. (September 14, 2012) - You might not think that the U.S. would post near record net farm income this year given widespread drought and poor crop conditions, but think again.
The USDA is projecting that inflation-adjusted national net farm income for 2012 will reach its highest level in 42 years, according to the USDA Economic Research Service.
University of Kentucky Agriculture Economist Will Snell told the Interim Joint Committee on Agriculture at UK’s E.S. Good Barn today that while record low commodities were once considered likely, results are now estimated to be much better than expected.
A rise in commodity prices, increasing indemnity payments, and less detrimental than expected effect from low crop yields are all considered factors in the rise in net income, reports the USDA
As for Kentucky, Snell said the state’s net farm income is typically $1 billion a year, but that the Commonwealth will be “challenged” to continue meeting that figure as buyout and direct payments to farmers wind down. Snell said both the local food movement—which offers direct funding to farmers—and the strengthening of the dollar internationally should help move the state forward.
As for agricultural cash receipts, Snell said Kentucky is not expected to reach a hoped-for $5 billion in total receipts for 2012. But, he said, the Commonwealth should be over the $4 billion mark “when it’s all said and done.”
“It won’t be as bad as some have anticipated,” Snell said.
According to the USDA, Kentucky has logged $2.8 billion in agricultural cash receipts for the first seven months of this year. That is a slight increase from the first seven months of 2011, Snell said.
Kentucky’s 2011 agriculture cash receipts totaled $4.9 billion—less than the more than $5 billion forecasted, Snell said.
UK will release its forecast for the state’s 2012 agricultural cash receipts late this year.
The committee also received a report from University of Kentucky President Eli Capilouto on the state of the university. Capilouto told lawmakers that UK not only has a record number of admission applications this semester, but that is has a record number of distinguished “Singletary” scholars and more than double the number of National Merit Finalists than last year.
UK has 71 National Merit Finalists this year, compared to 30 in 2011. That puts UK in the company of such well-respected universities as Duke, Cornell, Dartmouth, Ohio State, and Berkley, Capilouto said.