The total economic impact of the U.S. farm equipment industry is approaching $100 billion, according to the Assn. of Equipment Manufacturer — and it’s growing! That’s because 2013 has all the makings of another strong year for ag machinery sales.
- All three major measures of farm income are expected to achieve all-time nominal record highs. Inflation-adjusted net farm income — $122.2 billion — is the second highest since 1970.
- Crop receipts are leading the 2012 income increase, with strong gains in corn, soybean, hay and wheat sales reflecting higher commodity prices. A large anticipated rise in other farm income reflects large increases in crop insurance indemnity payouts.
- Government payments paid directly to producers are expected to total $11.1 billion in 2012, a 6.3% increase from $10.4 billion paid out in 2011.
— USDA September 11, 2012
And the top machinery analysts agree:
“Our model now suggests that major-crop cash receipts for 2012-13 is $150.6 billion, up 11% year-over- year.” — JP Morgan North American Equity Research, September 12, 2012
“We remain bullish on North American ag equipment as our channel checks indicate currently strong demand is not a bubble, but rather driven by favorable secular trends that still have legs.” — UBS Investment Research, September 12, 2012
Despite a challenging weather year for crops and livestock, the fundamentals and financial strength of the North American agricultural industry remain intact with no let up in sight. As it has demonstrated in recent years, America’s ag industry remains one of the most vibrant, most resilient industry segments that exists in today’s economy.
Buoyed by rising farmland values, record-setting commodity prices, elevated levels of farm income and low farm debt, the ag sector remains well positioned
to weather whatever challenges the economy faces. And agriculture’s outlook only continues to deliver opportunities for active participants.
In its “2012 Farm Income Forecast,” USDA summed up the 2012-13 crop year this way: “Extreme hot and dry conditions in the Plains and Corn Belt are drastically cutting projected corn and soybean yields. With corn and soybean supplies for the 2012-marketing year expected to be the lowest in nine years, prices are increasing dramatically, resulting in higher than expected 2012 calendar-year receipts for many crops.
“Farm equity is expected to increase to an all-time high of almost $2.3 trillion. Farm asset growth in 2012 is expected to exceed increases in farm debt as increases in the value of farm real estate and financial assets more than offset an anticipated rise in non-real estate debt. Farm real estate debt is predicted to decline slightly in 2012. Debt repayment capacity utilization (DRCU) — a measure of farm exposure to financial risk — is forecast to be at its lowest since 1970.”
Now, add in an insatiable hunger for biofuels — from across the globe — and agricultural products will continue in high demand for years to come.
About Lessiter Publications
Through our work reporting for 6 print publications and 5 e-newsletter properties, our ag editors benefit from a rare, inside look at the most progressive farmers on the con- tinent — as well as the dealers that bring the technology to them and the suppliers working on the next game-changing innovation. Seeing the market’s quest for efficiency and “a better way” to yield more profit on more acres and with less labor, we’ve never been more excited about the prospects of American agriculture. And the consumer’s desire for country living continues to breathe new life into rural communities.
With farm blood in our veins, we’re simply a hardworking team focused on a mission of helping our customers succeed. Our commitment to you is equally as simple: You’ll see us out in the field with our readers and at shows and events. We aim to share solutions to what keeps our readers awake at night; not regurgitating fluff or PR pieces. We’ll always take your calls on what you see or how we’re doing, and we invite your suggestions on benchmark-worthy farmers, dealers and manufacturers. These editorial principles are all part of the company’s DNA, consistent with our belief that content is the way to deliver an engaged, interested buying audience for you.
We’ve rallied around this “editorial-first” mission since our doors opened in 1981. Since the day he left his six-generation farmstead, Founder and Editorial Director Frank Lessiter never forgot what matters most to our customers. Trusted, practical and actionable information is what our readers need, and what will keep them coming back. That’s our commitment to you, and one you can bank on.
Here’s to continuing success in 2013!
YOUR AG EDITORS. From left, John Dobberstein, Michael Ellis, Dave Kanicki, Kim Kaiser, Mike Lessiter, Jack Zemlicka, Darrell Bruggink, Alan Stenum, Frank Lessiter and Cole Vandermause.