Across the Editor’s Desk: Your piece of 2012 pie
Did you get your share and more of last year's farm income pie? USDA estimates that 2011 net farm income will end up at $100.9 billion when the final numbers are tallied. That's a record amount and 28% higher than 2010. USDA reports that adjusted for inflation, the net value added of agriculture to the U.S. economy last year was the highest since 1974.
Weather had a lot to do with who got significant increases in income and who fell far short of expectations. Certainly a year ago the terribly late planting season for some you or the devastating drought for others was not in the plans or hopes for 2011.
Economists are cautious in their expectations for this year. As you've learned, so much depends on managing risk, says Business Editor Dan Looker, who wrote the article. He sums up what he's learned from expert sources this way: “I like their suggestions to lock in margins when the opportunity comes up, to consider buying higher levels of crop insurance, and to boost financial reserves for working capital.”
While your fields sleep, Looker suggests it is a good time to learn and investigate other ways to grow income and manage risk. He suggests evaluating the potential of adding new crops or enterprises to the farm. Especially consider enterprises where you sell directly to consumers. He also suggests diversifying with investments off the farm.
The college football bowl season is just beginning as I write this. As with crop yields,the excitement you feel at the end of the football season depends to a large extent on how well your expectations were met.
Here in Iowa, fans of Iowa State University (ISU) are thrilled with six victories and a bowl trip to New York City. The Cyclones were picked preseason to finish next to last in the Big 12 Conference. In contrast, many fans of the Oklahoma Sooners are greatly disappointed with their team's nine victories. The Sooners were picked not only to win the Big 12 (they finished third) but also to win the national championship.
I mention this because numbers and size are perceived differently by different people. A recent Successful Farming survey for the story “Sizing It Up” on page 44 found that only 7% of farmers describe their operations as large. Small and midsize were the other choices. The acreage numbers they gave suggest more of them might be large.
ISU's Mike Duffy was not surprised. “A big farmer is someone bigger than you,” he says.