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Net farm income expected to rise 31 percent in 2010 as ag weathered recession well

WILLMAR -- While much of the United States remains mired in the economic recession, many of the nation's principal agricultural states seem to be weathering the recession better than others.

Agricultural states, such as Minnesota, have typically seen fewer home foreclosures, fewer layoffs, a lower unemployment rate and an overall economy that has shown amazing resiliency.

Economists have been quick to note that a major contributing factor that has helped stabilize the overall economy in the principal agricultural states has been a very robust agricultural sector.

Most of the strength in the agriculture sector is the result of a combination of positive factors and trends, all happening at the same time. Such factors include: profitable grain prices; vastly improved prices for cattle, hogs and milk; favorable weather conditions; better than average yields; crop production problems in other key grain producing areas of the world; surging export demand; and a weak U.S. dollar.

The latest economic forecast from the U.S. Department of Agriculture would confirm that 2010 will be an outstanding year for agriculture, which could greatly enhance efforts to revitalize our nation's economy.

Net farm income is expected to reach $81.6 billion in 2010, up 31 percent from 2009 and 26 percent higher than the previous 10-year average of $64.8 billion.

While this forecast is still $5.9 billion below the all-time record high set in 2004, net farm income has shown a rebound from 2009, a year in which demand for agricultural products fell worldwide due to the global recession.

Cash receipts from sales of farm commodities are expected to rise 10.4 percent in 2010. Crop receipts are expected to increase $9.4 billion with cotton, soybean and corn receipts expected to show the largest gains. Livestock receipts are expected to increase by $20 billion in 2010, led by a surge in cash receipts for dairy and hogs.

Also contributing to the increase in net farm income was a rather modest increase in total production expenses, which are forecast to rise by 2 percent in 2010. That reverses a 4.1 percent drop in 2009, but is in stark contrast to the 15.7 and 8.8 percent increases of 2007 and 2008.

Another key measure of the overall health of the agricultural economy is net value added, which is expected to total $132 billion in 2010, up $20 billion from 2009 and 22 percent above the 10-year average.

An increase in the value of livestock production accounted for almost all of the upward movement in net value added. The value of dairy production is projected to rise by 29.6 percent, meat animal production by 16.4 percent, and poultry/egg production by 9.9 percent.

According to USDA, government payments are expected to total $12.4 billion in 2010, up 1.5 percent from 2009. Due to higher market prices, commodity program payments for grain and milk are expected to decrease by a combined $2.3 billion in 2010. However, other government payments are expected to increase by $2.5 billion, led by a nearly $2.2 billion increase in disaster assistance payments.

FSA committee election results announced

Local Farm Service Agency offices recently tabulated the ballots that were returned for the 2010 county committee election. All election winners will begin serving 3-year terms on Jan. 1.

In Chippewa County, Mike Knudson of Maynard was re-elected to his third term.

In Kandiyohi County, Linda Bjornberg of Willmar was re-elected for a third term.

In Meeker County, Eric Grimsgard of Grove City was re-elected for a third term.

In Pope County, Jane Reents of Villard was elected to her first term.

In Renville County, Orlynn Hegna of Granite Falls was elected to his first term.

In Swift County, Dennis Holt of Murdock was re-elected to his second term.

In Yellow Medicine County, Dennis Preuss of Echo was re-elected for a third term.

Nationwide, there are more than 7,800 farmers and ranchers serving as county committee members. Committees consist of three to five members who are elected by local agricultural producers.

Committee members make many important decisions regarding the local administration of the various commodity, price support, conservation and disaster assistance programs administered by USDA.

USDA closed today and Dec. 31

Since both Christmas and New Year's Day fall on a Saturday, the two federal holidays will be observed on the preceding Fridays -- today and Dec. 31.

Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.