Livestock producers will lead a recovery in U.S. agriculture the next two years as the broader economy improves and demand for beef, pork and dairy products increases, University of Missouri researchers told Congress.

Net farm income in 2010 is expected to jump 18 percent from 2009, to $66.5 billion, primarily because of the outlook for higher livestock prices, the Food and Agricultural Policy Research Institute, known as MU FAPRI, said in a report to the House and Senate agriculture committees.

“If jobs - and consumers - return, the agricultural sector will benefit,” said Pat Westhoff, co-director of the institute, according to a statement today. “Higher incomes increase the demand for food, feed, fiber and fuel, supporting farm commodity prices.”

Farm income last year plunged $30.7 billion, or 35 percent, from $87.1 billion in 2008 as a slumping global economy sent crop and livestock prices tumbling. The nation’s farmers, ranchers and dairy producers still have a deep hole to dig out of after the 2009 downturn prompted widespread herd reductions.

“The recovery would mark a major change in direction for the farm economy after a dismal 2009,” Westhoff said. “But 2010 farm income recovers only a third of the ground lost in 2009.”

Net farm income is projected to gain another 5 percent, to $69.8 billion, in 2011, MU FAPRI said. The projections are part of the institute’s annual U.S. Baseline Briefing report.

U.S. pork producers may approach breakeven profits in 2010 after “disastrous” 2009, said Scott Brown, MU FAPRI’s livestock economist. “Speed of the pork recovery hinges on the speed of economic recovery both at home and abroad.”

In beef, strengthening demand and tighter supplies may return profits for cow-calf producers and others in the industry this year. Even with improved profits and an outlook for expanding calf crops starting in 2013, beef supplies are not expected to turn up until 2014, Brown said.

U.S. milk prices are expected to climb as the global dairy market recovers from last year’s slump, Brown said. The U.S. average “all-milk” price is projected to rise by $4, or a third, from $12 per hundred pounds in 2009, the researchers said.

Dairy recovery “depends critically on the general economy,” Brown said, adding that “U.S. dairy is expected to become a larger player in world markets in the coming decade due to growing U.S. commercial dairy product exports.”

Corn prices, while down from a 2008 peak, will likely remain underpinned as growing demand from the ethanol industry consumes a larger portion of the U.S. crop, Westhoff said.

The farm price for corn is expected to average about $3.72 a bushel during the 2010-11 marketing year, up from $3.60 in 2009-10, today’s report said. U.S. planted acreage is expected to increase to 89.6 million acres, up 3.6 percent from 86.5 million a year ago.