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Arkansas Personal Income – 2012:Q3

Total personal income in Arkansas rose by 1.0% in the third quarter, with a particularly sharp increase in farm income.  According to today’s news release from the Bureau of Economic Analysis (BEA), Arkansas’ third-quarter growth rate was the second-highest in the nation (North Dakota had the highest growth rate).  Data for the first two quarters of the year were also revised upward — from 0.8% to 1.0% in the first quarter and from 1.2% to 1.4% in the second quarter.  Compared to the third quarter of 2011, personal income in Arkansas is up 3.8%.  For the total United States, income growth was 0.4% in the third quarter, and has totaled only 2.4% over the past four quarters.

Source: Bureau of Economic Analysis

Inflation (as measured by the price index for Personal Consumption Expenditures) rose at a rate of 0.4% in the third quarter, up from a 0.2% pace in the second quarter.  Consequently, real personal income in Arkansas rose by only 0.6% in the third quarter, and was up just 2.2% over the past year.  After this inflation-adjustment, Arkansas personal income is now slightly above its previous cyclical peak (by about 1.4%).

Source: Bureau of Economic Analysis

Arkansas was one of several agricultural states for which farm income figured prominently.  For the third quarter alone, farm income was up 19.6%, and accounted for approximately one-third of the state’s income growth.  The BEA report cited two special circumstances affecting agricultural income in the third quarter — both associated with the summer’s drought conditions.  One key factor was net insurance settlements — particularly in the states of the upper Midwest where crop damage from the drought was the most extensive.  In the south, third quarter farm income was also affected by a relatively early harvest season.  (The BEA cited Texas, in particular.)  As noted in previous posts, Arkansas farm output was not as severely affected by the drought due to the high proportion of irrigated farmland in the state, but weather conditions were such that crops were both planted and harvested earlier than usual.

Other than agriculture, earnings growth by industry in Arkansas generally mirrored the national averages.  Sectors with strong earnings growth included durable goods manufacturing, professional services, and health care & social assistance.  Transportation and warehousing fared well in Arkansas, but contributed little to the nation’s income growth.  On the other hand, earnings in the construction industry were weaker in Arkansas than for the nation as a whole (although the BEA report noted that construction income was particularly concentrated in Texas and Oklahoma).

Source: Bureau of Economic Analysis

Arkansas Crop Production Update

The USDA’s National Agricultural Statistics Service (NASS) released new forecasts for Arkansas agricultural output today.  The latest projections, if realized, will represent new record-high yields for corn and rice in 2012.  The expected yield for soybeans matches a record high from 2004.  Compared to the forecasts from last month, yield forecasts were revised upward for corn, cotton, rice and sorghum.  Total production for corn is now expected to exceed 2011 output by over 65%.  Sorghum production is projected to be 68% above last year’s level.

Source: USDA National Agricultural Statistics Services

Crop damage due to this summer’s drought was clearly not as devastating as some had feared — at least here in Arkansas.  Across much of the midwest, however, the story is quite different.  Nationwide corn production in 2012 is now expected 13.4% lower than in 2012.


USDA Forecasts Solid Gains for Arkansas Agricultural Production

New forecasts from the USDA’s National Agricultural Statistics Service (NASS) project sizable increases in Arkansas agricultural output in 2012.   Output figures from 2011 and projections for 2012 are summarized in the table below.

Source: USDA National Agricultural Statistics Service.
  • Corn production, in particular, is expected to be up sharply from last year.  The increase is attributable to increases in both the number of acres harvested (+23%) and the yield per acre (+23%).
  • Cotton production is expected to fall slightly, in spite of a 7% increase in yield.  The number of acres expected to be harvested is down 12%.
  • Rice production is expected to be up 18%, with gains coming from increases in both acreage (+11%), and yield (+6%).
  • Sorghum output is also expected to benefit from higher acreage (+22%) and yield (+11%).
  • Soybean production is expected to be essentially unchanged from last year, with acreage down 2% and yield up 3%.

These statistics suggest that damage from this summer’s drought and from Hurrican Isaac are not as severe as many had feared — at least in Arkansas.  Nationwide, the drought has had a larger impact.  For example, U.S. corn production is forecast to be down 13% and soybean production down 14%.  (Crop Production, September 2012).