USDA’s Economic Research Service (ERS) forecasts inflation-adjusted U.S. net cash farm income (NCFI, gross cash income minus cash expenses) to increase $26.6 billion (23.7%) in 2020, and then decrease $10.4 billion (7.5%) to $128.3 billion in 2021. U.S. net farm income (NFI) is forecast to increase $37.8 billion (44.2%) in 2020 and then decrease $12 billion (9.7%) to $111.4 billion in 2021.

Net farm income is a broader measure of farm sector profitability that incorporates non-cash items, including changes in inventories, economic depreciation and gross imputed rental income. If realized, this would be the first year NFI has fallen since 2016. However, both NCFI and NFI would remain above their respective 2019 levels as well as above their respective averages over the 2000-19 period.

Underlying these forecasts, cash receipts for farm commodities are projected to rise $13.6 billion (3.6%) in 2021. Direct Government payments to farmers are expected to fall $21.8 billion (46.3%) after increasing $24 billion (104%) in 2020. This decline is largely caused by lower anticipated payments from supplemental and ad hoc disaster assistance for COVID-19 relief.

Find additional information and analysis on the ERS topic page for Farm Sector Income and Finances, reflecting data released on Feb. 5, 2021.