We received enough calls in the past week or so to know dealers and suppliers are gearing up for their annual exercise in forecasting and best estimates for planning for 2014.

I’ve always been a proponent of direct customer input as the basis for any credible forecast, and we’re just finishing up our annual “Dealer Business Trends & Outlook” survey for next year. We’ve heard back from 200 dealers and we’ll share their feedback with our readers a little bit later.

Here’s some other macro forecast data that tends to get lost in all the news of volatile commodity prices, which you may find helpful in getting a clearer view of ag’s bigger picture and a better handle on your 2014 forecast.

Farm Assets: Farm asset values are expected to rise 7.1% this year, while farm debt is forecast to increase by only 2.7%. This will result in an increase of 7.6% in overall farm equity. Of all the components that comprise farm assets, the largest factor is real estate, which is expected to increase by 7.5%.

Farm Solvency: Maybe the best indicators of overall farm sector health are the debt-to-asset and debt-to-equity ratios. All indications are both of these are heading down, which is a very good sign of farm solvency in the longer-term. According to USDA, debt-to-asset ratio is expected to drop from an estimated 10.7% at the end of 2012 to 10.2% by the end of this year. The debt-to-equity ratio is also expected to decline from 12% in 2012 to 11.4% in 2013. The USDA says, “If realized, these changes would result in new historic lows for both measures, confirming the strength of the farm sector's solvency.”

Net Farm Income (cash income + value of inventory & other non-cash items):  Net farm income is forecast to increase 6%, to $120.6 billion in 2013. “This would be the second highest inflation-adjusted amount since 1973, with only 2011’s inflation-adjusted income being higher.”

Net Cash Income (cash expenses – commodities sold & other income sources): Net cash income is forecast to decline by more than 10% from 2012. “Substantial year-end crop inventories buoying the 2013 net farm income forecast are not reflected in net cash income.”

Crop & Livestock Receipts: The value of livestock production is expected to increase 5.2% in 2013, with receipts increasing nearly 4.9%. “The projected gains result mostly from expectations of higher prices.” Crop receipts are forecast to decline by $12.4 billion, or 5.5% in 2013, which would be the first decline since 2009. “Nonetheless, the value of crop production is expected to rise 2.7% in 2013, with increases boosting anticipated year-end crop inventories.”

Farm Expenses: At $354.2 billion, total expenses are projected to increase $13.1 billion in 2013, continuing a string of large year-to-year increases since 2010. “In both nominal and inflation-adjusted dollars, 2013 production expenses are expected to be the highest on record.”

We’ll bring you back to the dealer level outlook in the October/November issue of Farm Equipment. In the meantime, happy forecasting.