I'm just like a lot of you out there. When things seem to be going too well, I'm looking for what could possibly go wrong.
As we're preparing the 2012 farm equipment forecast, it's kind of scary to see how things are lining up for the coming year.
You've already heard about USDA's forecast for 2011 net income. In case you haven't, here it is in a nutshell:
In its August 30 report, USDA forecast both farm net income and net cash income will exceed $100 billion for the first time during 2011. At $103.6 billion, the revised net income projections are 31% higher than the agency's 2010 outlook. The forecast also calls for farm cash net income to increase by 16% year-over-year.
In its most recent report, the agency noted, "The 2011 forecast of net farm income is the second highest inflation-adjusted value recorded since 1973."
While crop cash receipts are expected to rise by 19% vs. 2010 levels, to $206.5 billion, livestock producers appear to be back on solid footing as USDA forecasts an increase of 12% for livestock receipts, to $163.8 billion.
With the strong historic correlation between total farm net income and ag equipment sales, dealers fully expect that the momentum of 2011 will positively impact sales of farm machinery well into 2012. The results from our "2012 Dealer Business Trends & Outlook Survey" reflect these sentiments.
A year ago at this time, equipment dealers exhibited a high level of confidence that the sale of farm machinery would continue to strengthen throughout 2011. This year, their outlook is even more self-assured.
Coming off a strong sales year that some are calling a "record year," nearly 90% of North American dealers expect revenue from new equipment sales to be as good or better than last year. More than half are projecting their sales revenues will rise anywhere from 2% to more than 8% during this next selling season.
We'll have more details for you in the October/November issue of Farm Equipment.
As is too often the case, it seems, the one thing that seems to have dealers hedging their bets about the year ahead is what's happening in Washington D.C. Me, too.
I believe the single biggest thing going against us in 2012 is uncertainty, and uncertainty is the antithesis of confidence.
Left to itself, agriculture is in for another outstanding year. The question is, "Will it be left to itself?" I'm afraid we all know the answer to that.