Net Farm and Cash Farm Income Rapidly Improving

WASHINGTON, DC – Inflation-adjusted U.S. net cash farm income, which is defined as gross cash income minus cash expenses, is forecast to increase more than $23 billion this year to $134.1 billion in 2020. If realized, this will represent a 21 percent increase over 2019. U.S. net farm income is a broader measure of farm sector profitability that incorporates noncash items like changes in inventories, economic depreciation, and gross rental income. For 2020, net farm income is forecast to increase $35 billion to almost $120 billion in 2020 – a 41 percent increase over last year. While cash receipts for farm commodities are forecast to fall 2.1 percent ($7.8 billion), direct Government payments are expected to rise to $46.5 billion, more than twice the 2019 amount, a result of supplemental and ad hoc disaster assistance payments for COVID-19 relief in 2020. Total production expenses however are projected to fall nearly 3 percent ($9.5 billion) in 2020, which includes a decrease of $5.6 billion in interest expenses. If realized, net farm income will be at its highest level since 2013 and 32 percent above its inflation-adjusted average over the past ten years. According to the Economic Research Service (ERS), net cash farm income would be at its highest level since 2014 and 22.5 percent above the ten-year average.
(SOURCE: All Ag News)