Inflation-adjusted U.S. net cash farm income (NCFI), defined as gross cash income less cash expenses, is forecast to increase $4 billion (3.6%) to $115.2 billion in 2020. U.S. net farm income (NFI) — a broader measure of farm sector profitability that incorporates non-cash items including changes in inventories, economic depreciation and gross imputed rental income — is forecast to increase $18.3 billion (21.7%) from 2019 to $102.7 billion in 2020.
While cash receipts from farm commodities are forecast to decline $15.2 billion (4.1%), direct government farm payments are expected to increase $14.6 billion (64.4%) because of supplemental and ad hoc disaster assistance payments for COVID-19 relief in 2020. Additionally, total production expenses — that are subtracted out in the calculation of net income — are projected to fall $7.3 billion (2.1%) in 2020, contributing to the growth in income.
If forecast changes are realized, NCFI would be 5.7% above its inflation-adjusted average calculated over the 2000-19 period and NFI in 2020 would be 13.8% above its 2000-19 average.
Find additional information and analysis on the USDA, Economic Research Service’s Farm Sector Income and Finances topic page, reflecting data released September 2, 2020.