Ag secretary reports rural economy is strong and farm exports are growing

WASHINGTON — Agriculture Secretary Tom Vilsack recently released the following statement in response to two USDA reports that show the strength of the overall rural economy and growth in agricultural exports:

“Today’s reports are encouraging news. They show that while American agriculture has struggled through difficult economic times, the 2008 farm bill … and the hard work and resilience of America’s farmers and ranchers have helped put American agriculture on the road to recovery.

“After declining more than 20 percent in 2009, all three measures of farm sector earnings experienced a rapid rebound and are forecast to rise in 2010:

Net cash income is expected to rise more than 23 percent to $85.3 billion — the second highest on record and above its previous 10-year average;

Net farm income has rebounded, up 24 percent from 2009, when demand for agricultural products fell worldwide due to the global recession;

Net value added, at $127.3 billion, is expected to be up $15.2 billion from 2009, and remain 17.7 percent above its 10-year average.

“Other indicators also point to a sustainable recovery: farm asset values are projected to increase by 2.5 percent in 2010, as are equity values. And average farm family household income is projected to reach more than $81,000 in 2010 — up 5.8 percent from 2009.

“And this recovery is sector-wide. While an increase in the value of livestock production accounted for much of the upward movement, the value of dairy production rose by 26.2 percent; the value of meat animal production is up 14.6 percent, and the value of poultry and egg production rose 8.4 percent.

“And commercial farms and intermediate farms are all expected to have higher average net cash income in 2010 than they did in either 2009 or 2008. Rural residence farms will have lower net cash losses.

Reasons

“A host of factors contributed to this strong and rapid recovery. Successful implementation of the 2008 farm bill passed by the U.S. Congress … provided strong support for American agriculture. We have maintained a strong safety net for the agricultural economy by providing farmers and ranchers across America with direct support, disaster assistance, technical assistance, support to struggling industries, and access to credit.

“At the same time, we worked to build a stronger agricultural economy for future generations of Americans by investing in research, maintaining fair markets and promoting marketing policies that will keep American agriculture the most productive and successful in the world.

Exports. “Another factor driving this recovery is an increase in income from exports. USDA is excited to announce that we are raising our forecast for agricultural exports for fiscal year 2010 to $107.5 billion — the second highest year on record.

“This a $3 billion increase from the May forecast, and an $11 billion increase over last year. And agriculture is one of the only major sectors of the American economy with a trade surplus — expected to be $30.5 billion this year.

“What’s more we expect to sustain this important progress. The outlook going forward into fiscal year 2011 is even more promising, showing $113 billion in agricultural exports.

“Increased agricultural exports — especially of grains and meat — have helped drive this rebound. It helps create important income opportunities for producers as well as the off-farm jobs that are so critical for strengthening economies in rural America. In fact, every billion dollars in agricultural exports supports over 8,000 jobs and generates an additional $1.4 billion in economic activity.”