What is the Economic Outlook for Farms and Ranches?

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The Agricultural and Food Policy Center (AFPC) at Texas A&M University and the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri recently published their Representative Farms Economic Outlook for December 2010. This baseline report offers an assessment of farms, crops and their financial outlook.

Feed grain producers across the nation should increase the financial strength of their operators over the next five years, helped by strong commodity prices. Farms that have been in marginal or poor financial position in the last several years because of lower grain prices should recover and climb into stronger financial positions.

Some highlights include:

  • Over 70 percent of representative wheat farms are classified in good overall financial condition given the 2010 baseline; the 2010 baseline results in no farms classified as poor.
  • Corn and Soybean prices are projected to increase sharply in 2010 from study period lows experienced in 2009.
  • Rice prices are projected to decline substantially from highs experienced in 2008 and 2009 and hold in a narrow range from $12.25/cwt to $12.78/cwt for the 2010-2015 period.
  • Milk prices are projected to rebound substantially from a low of $12.93/cwt in 2009 to $16.50/cwt in 2010. Milk price is expected to increase annually throughout the projection period, eventually reaching $18.27/cwt in 2015.
  • The percentage of cattle ranches classified as marginal remained the same as in 2009 while the percentage of ranches classified as good increased slightly under the 2010 baseline.