USDA released its latest Farm Sector Income Forecast on Tuesday, predicting increases in total value of crop, livestock, dairy, and poultry production compared with 2012. Production expenses are also up, however, and lower corn prices will offset some of the benefits of what appears to be a record-large corn crop.

The report forecasts 2013 net farm income at $131.0 billion, up 15.1 percent from 2012’s estimate of $113.8 billion. After adjusting for inflation, 2013’s net farm income is expected to be the highest since 1973.

Net cash income however, is forecast at $129.7 billion, down 3.4 percent from 2012. The difference is that net farm income includes change in inventories and other adjustments. Significant volumes of crops produced in 2013 will not be sold by the end of the calendar year, so those stored crops, particularly corn, contribute to the value of inventories, which boosts net farm income but not net cash income. The total value of crop production is expected to rise nearly 6 percent in 2013.

The value of livestock production is expected to increase by 6 percent in 2013, with receipts also increasing by almost 6 percent, with the largest gains in broilers, milk, and hogs. Prices for cattle and calves have increased over those from 2012, but smaller inventories offset some of that value. The report indicates a small increase in the value of cattle and calf production from $66.5 billion in 2012 to $67.1 billion in 2013.

The report projects a $10.9-billion, or 3.2 percent increase in total production expenses in 2013. With the exception of 2009, farm production expenses have increased every year since 2002. The report projects total farm expenses at $352 billion. However, the rate of increase in expenses during 2013 is projected at less than half of the increases in 2012 and 2011, due to a slowdown in the rise of prices paid for farm inputs.

Read the full Farm Sector Income Forecast from USDA.