USDA Projects Decrease in Net Cash Farm Income

KANSAS CITY, MO – USDA’s Economic Research Service forecasts inflation-adjusted U.S. net cash farm income (NCFI)—gross cash income minus cash expenses—to increase by $12.6 billion (9.9 percent) to $139.0 billion in 2021 and then decrease by $2.9 billion (2.1 percent) to $136.1 billion in 2022.

U.S. net farm income (NFI) is forecast to increase by $20.7 billion (20.1 percent) to $123.4 billion in 2021 and then decrease by $9.7 billion (7.9 percent) to $113.7 billion in 2022.

Net farm income is a broader measure of farm sector profitability that incorporates noncash items, including changes in inventories, economic depreciation, and gross imputed rental income.

If these forecasts are realized, both NCFI and NFI will remain above their respective 2001–20 averages in 2022. Cash receipts for farm commodities are projected to rise by $13.7 billion (3.1 percent) to $461.9 billion in 2022, their highest level since 2014.

During the same period, production expenses are expected to increase by $5.9 billion (1.5 percent) to $411.6 billion in 2022, offsetting some of this income growth.

Additionally, direct Government payments to farmers are projected to fall by $16.4 billion (58.5 percent) from 2021 levels to $11.7 billion in 2022, largely due to lower anticipated USDA and non-USDA payments for Coronavirus (COVID-19) pandemic assistance.
(SOURCE: All Ag News)