The Federal Reserve says U.S. farm income could decline in 2013, but it depends upon whether the drought continues.
The Federal Reserve Bank of Kansas City, Mo., said Thursday that if drought conditions persist, prices of corn and other crops would remain volatile because of tight supply. But if normal weather conditions return, crop prices would decline and lead to lower farm incomes.
The USDA predicted farm income in 2012 would reach $114 billion, which would be the third-highest total on record. Crop insurance and high crop prices last year contributed to that.
Current market prices suggest corn and soybean prices could be 10 to 15 percent lower by next fall.
The 10th Federal Reserve District covers Kansas, Nebraska, Oklahoma, Wyoming, Colorado, northern New Mexico and western Missouri.