MODERATOR: Good afternoon, everyone, and thank you for joining us this afternoon for today's media briefing. Agriculture Secretary Tom Vilsack will be highlighting new forecasts for farm income and agricultural trade. If you would like to ask a question of the Secretary, let us know by pressing Star/1 on your phone.
And now here's Agriculture Secretary Tom Vilsack.
SECRETARY VILSACK: Susan, thank you very much, and thank you all for your patience. We had a technology glitch here. We were on the same line you all were on and couldn't, for some reason, indicate that we were ready to go a couple of minutes ago, so we apologize for the delay.
I do want to talk to you today about our farm income and export forecast for 2010 and 2011, and I would say that today's reports are very encouraging news. They show that while American agriculture has struggled in the past through difficult economic times, the 2008 farm bill, the efforts of the Obama administration in the Recovery Act, as well as the hard work and innovation and productivity of American farm families has now put American agriculture on the road to recovery.
After a significant decline of more than 20 percent in 2009, we looked at three measures of farm sector earnings, all of which are experiencing a rapid rebound and our forecast to rise in 2010. Our experts at ERS are forecasting the net cash income is expected to rise by more than 23 percent to $85.3 billion, which would be the second highest recorded on record.
At the same time, net farm income has also rebounded, increasing by 24 percent, well above its previous 10-year average. This is a reflection of an improved economy globally and additional efforts on the export side, which I'll talk about in a few minutes.
As a result of these two farm sector earnings increasing, we are also seeing net value added expected to rise, as well as asset values on farm families' assets. They will continue to rise, a projected increase by 2.5 percent as values increase and as debt decreases.
The average family farm household income, which also takes into consideration off-farm income in rural communities, is also projected to increase by 5.8 percent, and part of it is a result of off-farm income increasing at 3.3 percent, at a rate a little bit faster than the general economy, which is one reason why we've seen unemployment in rural areas decline at a rate faster than the rest of the country.
The great thing about this recovery is it's sector-wide. While an increase in the value of livestock production accounted for much of the upward momentum, the value of dairy production has also risen by 26.2 percent. The value of meat animal production is up 14.6 percent. The value of poultry and egg production rose 8.4 percent. Commercial and intermediate-size farms are expected to have higher average cash net incomes in 2010 than they did in either in 2009 or 2008. And rural residence farms, which are the smaller operations, will have lower net cash losses.
A host of factors contribute to the strong and rapid recovery, and I think part of it has to do with the 2008 farm bill, which was passed by Congress, and I think the Recovery Act is also beginning to take effect in rural area.
We've maintained a strong safety net for the agricultural income, for agricultural economy by providing farmers and ranchers with direct support, disaster assistance, technical assistance, and access to credit. At the same time, we worked to build a stronger agricultural economy by investing in research, maintaining fair markets, and promoting new marketing opportunities here and abroad.
As I indicated, another factor that's driving this recovery is an increase in income from exports. Today, USDA is also announcing that we are raising our forecast for ag exports for fiscal year 2010 to $107.5 billion. This is the second highest year on record. This is a $3 billion increase from our May forecast and an $11 billion increase over last year. Agriculture is one of the few major sectors of the economy today that has trade surplus, which we are now forecasting to be a little over $30 billion.
What's more, we expect this progress to continue. The outlook going forward in the fiscal year 2011 is even more promising than in 2010, showing $113 billion in ag trade, which would give us the second best record again on record and very near the record of 2008 of $115 billion. This will give us an ag surplus of a little over $31.5 billion.
Increased ag exports, especially of grains and meat, are going to help drive this rebound, and not only will they create better income opportunities for our producers, but also they'll create more off-farm job opportunities. As we know, every billion dollars of ag export supports somewhere between 8- and 9,000 jobs and generates an additional $1.4 billion in economic activity.
We at USDA have provided support to increase exports as part of the President's National Export Initiative. We've also taken a look at a strategy, a new global strategy for trade, which allows us to focus on individual markets, and we continue to promote biotechnology.
But most importantly of all, I think, we can't forget the importance of the underlying values of rural America and the farmers and ranchers and farm and ranch families, growers that live in rural America. American agriculture entered the recession with very little debt relative to the rest of the economy, and that has helped us survive. The farm sector debt is expected to decrease in 2010.
There's obviously an extraordinarily strong belief in the value of hard work which positioned our farmers to capitalize on economic recovery, and the use of innovation has increased productivity dramatically. I would say that American agriculture has led with incredible productivity and adaptation to new and difficult challenges and is embracing new research and innovation like few other sectors in the American economy.
From the first day we've been in office, the Obama administration has focused on reversing a decade's worth of failed economic policies that helped to cause the worst recession since the Great Depression, and we've taken steps here at USDA to move the economy forward in rural America to get people back to work while rebuilding a strong economic foundation to ensure future prosperity.
I'm hopeful that American agriculture is leading the way towards an overall recovery in this country, but these are certainly good, strong, positive numbers today, both on the export side and on the income and asset value side.
Source: USDA