According to the USDA’s August 2019 Farm Income Forecast, released Aug. 30, net farm income is forecast to see a $4 billion increase or a 4.8% improvement in 2019, following increases in both 2017 and 2018. Adjusted for inflation, that amounts to $2.5 billion or 2.9%.
Net cash farm income was also forecast to rise by $7.6 billion or 7.3%; adjusted for inflation, this amounts to $5.8 billion or 5.4%. If this increase is realized, that would put net cash farm income at $112.6 billion, 4% above its 2000-18 average.
Cash receipts for all commodities are forecast to decrease $2.4 billion (0.6%) to $371.1 billion in 2019. Total animal/animal product receipts are expected to improve by $0.9 billion (0.5%) but fall 1.3% when adjusted for inflation. Total crop receipts are expected to decrease $3.3 billion (1.7%) in nominal terms from 2018 levels following expected declines in soybean receipts. Direct government farm payments are forecast to rise $5.8 billion (42.5%) to $19.5 billion in 2019, with most of the increase due to higher anticipated payments from the Market Facilitation Program.
Total production expenses (including operator dwelling expenses) are forecast to rise by $1.5 billion (0.4%) to $346.1 billion in 2019. Spending on feed and hired labor is expected to be up while spending on seed, pesticides, fuels/oil and interest are expected to decline. After adjusting for inflation, total production expenses are forecast to decrease $4.6 billion (1.3%).
Farm business average net cash farm income is forecast to improve by $8,400 (11.4%) to $81,900 per farm in 2019. This would be the first annual increase after 4 consecutive years of declines.
Farm sector equity is forecast up by $46.1 billion (1.8%) in nominal terms to $2.67 trillion in 2019. Farm assets are forecast to be up by $59.8 billion (2%) to $3.1 trillion in 2019, reflecting an anticipated 1.9% rise in farm sector real estate value. When adjusted for inflation, farm sector equity and assets are forecast to be relatively unchanged from 2018. Farm debt in nominal terms is forecast to improve by $13.7 billion (3.4%) to $415.7 billion, led by an expected 4.6% rise in real estate debt.
Median Farm Operator Household Income Forecast to Increase 3.7%
Median farm household income is forecast to reach $74,768 in 2019, an increase of 3.7% in nominal terms or an inflation-adjusted 1.9% increase. The total median income of U.S. farm households rose steadily over 2010-14, reaching an estimated $81,637 in 2014 in nominal terms. Median farm household income then fell 6% in 2015 and continued to decline slightly through 2018.