LOUISVILLE, Ky. (AP) — Having endured a turbulent year marked by high inflation and extreme weather trends, Kentucky agriculture is on pace to achieve record-setting cash receipts, agricultural economists said Thursday.
Statewide farm cash receipts this year are projected to approach $8 billion, easily surpassing the 2021 record-high of $6.9 billion, according to a team of University of Kentucky ag economists.
“Adjusted for inflation, our 2022 estimate, if achieved, will be 19% higher than the inflation-adjusted average over the previous 10 years,” said Will Snell, among the ag economists.
Even with record increases in input expenses and considerably lower government payments, the U.S. Department of Agriculture predicts U.S. farm income will be higher in 2022, he said.
Farmers benefited from relatively high national commodity prices. Farm-level prices in Kentucky will more than offset lower yields for most agricultural enterprises, Shell predicted.
“Extensive periods of excessive rain early in the growing season, followed by drought conditions during the critical growing periods, led to lower crop yields," he said.
The surging value of U.S. agricultural exports offered another boost for farmers, with gains across most commodities, Snell said.
Tobacco used to be the king of Kentucky agriculture, but its steep decline has resulted in a highly diversified farm sector.
The poultry sector is expected to regain the top spot in Kentucky agriculture, accounting for a projected 20% of all receipts, the economists said. Soybeans and corn are expected to follow, both at 18%, with the equine industry close behind at 16% and then cattle at 13%.
Wholesale broiler prices were up over 40%, year-over-year, and the high prices “more than made up for the decrease in overall production," said Jordan Shockley, another UK ag economist.
UK ag economist Greg Halich said profitability for grain crops looks good for 2023, even considering the significant increase in input prices.
Prices for some input costs, such as fuel and fertilizer, have moderated in recent months, but they remain relatively high and volatile, Snell said.
The university ag economists offered their outlook for the state's farming sector during the Kentucky Farm Bureau’s annual meeting.