LOUISVILLE, Ky. — University of Kentucky (UK) College of Agriculture economists made their agricultural predictions for the 2011-12 season at this year’s Kentucky Farm Bureau Annual Meeting – and the news was record-breaking.

If their forecast is correct, Kentucky will reach an unprecedented milestone in farmgate cash receipts, which should top out between $5.2 billion-$5.4 billion. This would mark the first time in the state’s history that ag receipts make it over the $5 billion level.

It also falls in line with what these same ag experts predicted at last year’s conference. In 2010, cash receipts totaled $4.4 billion.

UK ag economist Will Snell said the increase reflects the national picture, which will reach the $104 billion mark in net farm income, a record of its own.  Kentucky’s net farm income will not be a record, but will bounce back from the 2010 level of $780 million, to above $1 billion this year.

“It has been quite a year for U.S. agriculture. When we look at the overall economy, with very anemic economic growth, with high unemployment, with record deficits, it’s certainly a challenge, but as we all know there’s one sector out there that’s doing very, very well and that’s agriculture,” he said.

“Basically, on the heels of very tight supplies and strong demand we’re looking at record prices for crops and livestock the past year, and even though we’ve had higher production expenses, for the first time in the history of U.S. agriculture, we’re looking at over $100 billion of net farm income, up 28 percent from last year and 50 percent over a 10-year average.”

Snell added 90 percent of that net farm income originated from the marketplace. That could weigh heavily into the discussion federal lawmakers will have next year regarding the 2012 farm bill and the impending argument over cutting commodity supports. While these payments had little to do with the overall net income in the nation as well as in Kentucky, Snell stressed the payments are still important.

Agricultural exports also figured prominently into 2011 farm income. Snell said globally, especially in Asia, there has been phenomenal economic growth. That, along with a low U.S. dollar value, boosted the value of farm exports to record levels, while the strong farm economy coupled with low interest rates has resulted in increased farmland values.

In Kentucky, the once two largest sectors of the agriculture industry, tobacco and horses, have lost nearly $1 billion in value over the last decade. Still, Snell said Kentucky farmers have managed to sustain and grow cash receipts in that time.

Solid gains came this year across the board from grains, cattle, horses, dairy and hogs, with stability within the poultry and tobacco sectors, said Snell. The top ag sectors will likely be poultry and corn, but not necessarily in that order. Snell emphasized it is possible corn will rival poultry as the No. 1 ag enterprise for 2011, depending on the timing of the corn sales.

Other goods have enjoyed the monetary growth, including horticulture products. As state farmers diversified their operations, Kentucky’s horticulture sector has seen steady growth over the last decade. The UK outlook estimates 2011 gross sales could be $115 million-$120 million, an increase of 10 percent over last year.

Tim Woods, an extension professor in the Department of Agricultural Economics, said there are opportunities for state growers as demands increase. Those demands are reflected in the rise of imported fruits and vegetables, and Woods feels the local food movement can benefit from those consumers wishing to purchase goods raised close to home.

“Back in 2008 we had this new legislation, Country of Origin Label, because a lot of consumers were concerned about where the products were coming from and was it safe,” he said. “It plays very well to the opportunities that folks who are trying to sell under the ‘buy local’ banner, where people have a feeling of ‘I trust this product, I know the person and I feel much more comfortable going down to the farmers’ market and see the farmer face-to-face.’”

UK College of Agriculture Dean Scott Smith addressed the gathering and said he first spoke there in 2001, and asked those attending to think about what changes have taken place in Kentucky agriculture.

“That was a year in which farmgate receipts were about $3.5 billion, but they were on their way down. The Thoroughbred industry was reeling from Reproductive Loss Syndrome; we were looking forward to the loss of the federal tobacco program; little did we know we were about to experience the worst economic downturn since World War II,” he said.

“Prospects were not what they are today, to say the least. You saw numbers of $3 billion and $3.5 billion and wondered where we were going to be in 2011, and I am just delighted to see the number ($5 billion) floating around here today.”