Farm Business Economics Report, 1995

The farm sector remained financially strong in 1995, even though farm sector income was lower than in 1994. The value added to the U.S. economy by the farm sector declined $12.5 billion from that of 1994. Lower output, combined with $6.4 billion in additional expenses, accounted for most of the fall in net value added. Although crop sales rose almost $6.3 billion in 1995, a significant share of the increase came from inventories of crops produced in 1994's bumper harvest, sold at rising prices, and not from 1995 output that could be counted in 1995 value added. Commodity cost and return estimates show that higher 1995 prices led to higher per acre returns for corn, wheat, and rice, despite lower yields and higher expenses. Farm equity continued to increase, as it has since 1990, with asset values rising faster than farm debt. Farm assets came close to a trillion dollars, and although debt increased to $151 billion, equity pushed upward to $827 billion. These are some of the highlights of this report, which provides data and commentary on the income and finances of the farm sector, at both the national and State level, and estimates of production costs for major field crops, livestock, and dairy.