Net Cash Income Falling, Net Farm Income Rising

WASHINGTON, DC – U.S. net cash farm income is forecast to decrease 10.7 percent or $13.1 billion in 2020. Net farm income, a broader measure of farm sector profitability, is forecast to increase $1.4 billion or 1.4 percent in the new year. If forecast changes are realized, net cash farm income in 2020 would be .6 percent below its inflation-adjusted 20-year average. Net farm income, on the other hand, would be 5.4 percent above its 20-year average. The trajectories of the two-income measures diverge in 2020 largely because of how net sales from inventories are treated. Net cash farm income records income in the year the sale took place, while net farm income counts it in the year the production occurred. High net sales ($14.9 billion) from crop inventories forecast in 2019 are expected to boost net cash farm income significantly that year. Very low net sales from inventories ($0.5 billion) in 2020 are expected to contribute to a decrease in net cash farm income between the two years.