Posted: Thursday, September 22, 2011 10:00 AM
Anyone looking for a bright spot among the decidedly unbright data points that tell the story of the U.S. economy need only look at agriculture.
Buried among a set of spreadsheets compiled by the U.S. Bureau of Economic Analysis are numbers that reveal the strength of the agricultural economy.
For example, overall farm income has jumped 72 percent between 2009 and the second quarter of 2011. Though 2009 represents a dip in farm income because of low commodity prices -- it was down 12.6 from 2008 -- the rebound is remarkable.
According to the statistics, the ag economy appears to be gaining momentum. Farm income was up in the first half of 2011 compared to the first half of last year.
Nonfarm income -- everyone else -- did not fare nearly as well, according to the bureau. It increased 9 percent from 2009 to 2010 and 5.4 percent on annualized basis through the second three months of 2011.
While it's certainly reassuring to see plus signs in front of all of those percentages, it is clear that agriculture's rebound is far more robust than that of the economy at large.
Much of the higher income can be attributed to higher prices for many commodities. Record-high prices for corn and near-record high prices for milk, hay and several other crops continue to drive incomes upward, according to analysts.
Overall, the picture for farm income far outshines the rest of the economy.
In Idaho, for example, "agriculture was responsible for the entirety of the gain in personal income in the first quarter," Bob Fick, spokesman for the Idaho Department of Labor, told reporter Sean Ellis.
The downside of the news is that farm expenses such as fuel continue to rise. Energy prices in July, the most recent month the bureau reported, were up 20.1 percent over July 2010. Because many inputs involve petroleum or natural gas, their prices are up as well.
Higher prices for some commodities are the result of several factors, but an increase in exports appears to be the key. As the value of the U.S. dollar has slid, wheat, dairy products, meat, hay and other commodities have become more attractive in overseas markets.
That being said, some sectors of agriculture continue to struggle. The nursery industry, which soared during the go-go housing market, has seen 40 percent of its annual income disappear since 2008. Experts predict that a significant rebound is likely only when the housing market bounces back.
Overall, though, U.S. agriculture is pulling more than its share in helping the nation's economy rebuild. Many farmers and ranchers have weathered the storm and are coming back stronger than ever.
American agriculture is due a tip of the hat.