USDA’s Economic Research Service forecasts inflation-adjusted net cash farm income (NCFI)—gross cash income minus cash expenses—to increase by $19.8 billion (17.2%) from 2020 to $134.7 billion in 2021. U.S. net farm income (NFI) is forecast to increase by $15 billion (15.3%) from 2020 to $113 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 this forecast is realized, NFI would be 20.4% above its 2000-20 average and would be the highest since 2013. NCFI would be 18.9% above its 2000-20 average and would be the highest since 2014. Underlying these forecasts, cash receipts for farm commodities are projected to rise by $51.2 billion (13.8%) from 2020 to 2021, their highest level since 2015. Production expenses are expected to grow by $12.9 billion (3.5%) during the same period, somewhat moderating income growth. Additionally, direct Government payments to farmers are expected to fall by $19.3 billion (40.8%) in 2021 compared with 2020’s record high payments. This decline is largely caused by lower anticipated payments from supplemental and ad hoc disaster assistance for Coronavirus (COVID-19) relief.
Find additional information and analysis on the USDA, Economic Research Service’s topic page for Farm Sector Income and Finances, reflecting data released on September 2, 2021.
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