"According to USDA's Economic Research Service (ERS), national net farm income -- a key indicator of U.S. farm well-being -- is expected to rise nearly 48% in 2007 on the strength of higher commodity prices, which, in turn, are being driven largely by the rapidly growing demand for corn as a feedstock in ethanol production.1 Net farm income is forecast at $87.1 billion, up from $59 billion in 2006, as projected record agricultural cash receipts of $276.4 billion (up $37.1 billion or 16%) more than offset record high production expenses (up $249.9 billion or 7%) and a decline of over $2 billion in government payments. Crop and livestock receipts are both projected to reach record levels in 2007 of $136.2 billion and $140.2 billion, respectively. Higher prices are behind the surge in both crop and livestock receipts. The projected rise in crop prices is expected to reduce price-triggered marketing loan benefits and counter-cyclical payments, leading to lower total government payments. Total farm asset value of $2,223 billion and total farm debt of $214 billion are both projected at record levels in 2007. However, the debt-to-asset ratio of 9.6% is down sharply from last year's value of 10.5% and represents the lowest level since 1960, suggesting a strong financial position for the agricultural sector as a whole. This report will be updated as events warrant."
CRS Report for Congress, RS21970
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