by Chas Bonner
We don’t want to bore you with statistics, but the latest USDA Economic Research Service’s 2010 forecast is filled with interesting and generally heartening ones.
And when talking about averages, we must remind ourselves we are average temperature when one foot is in the fire and the other in a bucket of ice. Nonetheless, USDA projects net farm income to be up 12% in 2010. Despite 12% being a big increase, when looking at the number compared to the prior 10 year average, it is still $1.4 Billion below the 10 year average of $64.5 Billion for all US agriculture.
Up is up, and that is the right direction. Some of the reasons for this improvement:
- Expenses, especially fuel and fertilizer, have fallen 50% from their highs.
- The weak dollar is pushing exports.
- Many grain products have weakened, which is music to livestock ranchers.
- Borrowing costs are dramatically lower, almost by historic proportions.
- Dairies are finally coming out of the doldrums, with cash receipts to dairies expected to be up $11.5 Billion.
- Even beef cattle are expected to increase $2.5 Billion, mostly attributable to recovering global economy that foresees an 8% increase in exports.
- Best of all, there are few dark clouds.
As a result, we are already seeing the beginnings of stronger real estate values, nothing like the mid 2000’s, but nonetheless an absolute cessation of downward sliding as most reports indicated a year ago.
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