High corn prices are expected to bring major shifts in crop production during the next two years, with an additional 8.4 million acres added this year. According to the 2007 agricultural economic baseline prepared for the U.S. Congress by the Food and Agricultural Policy Research Institute, corn use for ethanol could exceed 4 billion bushels, or 32 percent of the nation’s corn crop, by 2009.
Net farm income dropped $26 billion in 2006 from a record high of $85 billion in 2004. Higher input costs are largely responsible for the drop. Net farm income could rise by $7 billion in 2007, to $66 billion and could hold above $60 billion in later years. Three years of profits for pork producers will end this year as the price of producing pork is expected to go up 6 cents a pound, or 16 percent.
The baseline report, which will be used to analyze the 2007 Farm Bill, has been given to the Senate and House ag committees and USDA. It is available for review on the University of Missouri FAPRI Web site at www.fapri.missouri.edu.