Farm Income and Costs: Data Sources

Overview 2012 Farm Sector Income Forecast (Updated 2/13/2012) 2011 Farm Sector Income Forecast (Updated 2/13/2012) 2010 Farm Sector Income Estimates (Updated 8/30/2011) Farm Business Income (Updated 2/13/2012) Assets, Debt, and Wealth (Updated 2/13/2012) Farms Receiving Government Payments Data Sources Recommended Readings Recommended Data Glossary

The August 6, 2009 estimate of 2008 net farm income was the first USDA estimate for that year that was based on observed farm-reported data for both receipts and expenses. Prior discussions of 2008 net farm income, receipts, and expenses were based on outlook forecasts. The estimates reported for 2008 included farmers' responses to the 2008 Agricultural Resource Management Survey (ARMS).

The estimates of farm value added for 2008 and prior years reflect revisions to prior years' estimates by USDA's National Agricultural Statistics Service (NASS). USDA's Economic Research Service (ERS) relies heavily on NASS data sources (see Sources of data: value added to the U.S. economy by its agricultural sector) to estimate value added and net farm income. NASS revisions to its earlier estimates—reflected in its various Final Estimates statistical bulletins (see USDA's Net Farm Income: NASS Statistical Bulletins) and its Farm Production Expenses Annual Summary—incorporate USDA's 2007 Census of Agriculture and other information. These revisions are both necessary and customary following each census. Revisions of previous estimates by NASS of its data require revisions by ERS of its estimate of value added and net farm income, both for the 50 States and the United States. What was unusual in 2009 was the particularly large change in the 2007 estimates of production expenditures that were a result of the inclusion of information from the 2007 Census of Agriculture.

Statistical Bulletins Used in USDA's Net Farm Income Estimates for 2007 and prior years

1. Citrus Fruits - Final Estimates
2. Field Crops - Final Estimates
3. Noncitrus Fruits and Nuts - Final Estimates
4. Vegetables - Final Estimates
5. Potatoes and Sweet Potatoes - Final Estimates
6. Crop Values - Final Estimates
7. Agricultural Land Values and Cash Rents - Final Estimates
8. Farms and Land in Farms: Final Estimates
9. Cattle - Final Estimates
10. Hogs and Pigs - Final Estimates
11. Milk Cows and Production - Final Estimates
12. Sheep and Goats - Final Estimates
13. Chickens and Eggs - Final Estimates
14. Honey - Final Estimates
15. Meat Animals Production, Disposition, and Income - Final Estimates
16. Milk Disposition and Income - Final Estimates
17. Poultry Production and Value - Final Estimates
18. Mink - Final Estimates

Note: ERS used the above 18 statistical bulletins in its estimates of value added and net farm income for 2008 and prior years. The data contained in these statistical bulletins reflect changes in previous estimates provided by NASS based on their review of the 2007 Census of Agriculture and other information.

The annual values for crop cash receipts for each State are based on data obtained from both published and unpublished NASS sources, the annual ARMS Phase III, and Farm Service Agency Commodity Credit Corporation (CCC) loan data. NASS annual crop quantities produced for each State are converted to quantities sold. Crop quantities are allocated over the 12 months of the calendar year using NASS monthly marketing percentages for that State then converted to monthly open-market cash receipts using monthly average State prices. In lieu of State monthly prices, the annual crop marketing-year estimates of sales are allocated over the calendar-year months to obtain each State's calendar-year annual estimate. Monthly CCC loan receipts plus any profits from CCC transactions are added to the open-market sales to create monthly cash receipts. The sum of the State's monthly cash receipts from January through December for each crop obtains its calendar-year annual cash receipts. The U.S. estimate for each crop is the sum of the States' annual estimates.

The annual values for livestock cash receipts are based on published and unpublished NASS data sources, namely the annual Production, Disposition, and Income (PDI) reports. The Meat Animal PDI report contains information on Cattle & Calves, Hogs, and Sheep & Lambs. Dairy cow data are derived from the Milk PDI. Broiler, turkey, and egg data are provided by the Poultry & Egg PDI. The livestock commodities not accounted for in these reports are presented in other commodity specific reports such as "Honey" or "Trout." Receipts for commodities not accounted for in individual or grouped reports are collected in a Minor Commodities report. Unlike the crop cash receipts, all livestock commodities are measured on a calendar year basis, so no transformations from commodity year to calendar year are required. The U.S. estimate for each livestock category is the sum of the States' annual estimates.

Annual estimates of home consumption for each State are based on State annual ARMS estimates for the 15 largest agricultural States. Estimates for the remaining States are based on their proportion of farm operations, reflecting the most recent NASS data, within their particular region. The value of inventory adjustment reflects the sum of each State's inventory adjustments for their respective crop inventories. Inventory adjustments reflect the value of the annual quantity change in inventories. U.S. estimates are a summation of the State estimates.

The majority of USDA estimates of farm sector production expenses for the 48 contiguous States are derived from annual ARMS results. USDA economists from ERS and NASS utilize survey indications to produce estimates of 18 individual production expenses for the United States, 5 geographical regions, and 15 "core" States. The "core" States are the largest in terms of agricultural production. They are more heavily sampled so that the survey yields statistically valid data for each State. Estimates are made of each production expense based on survey results for the individual expense and are summed to generate an estimate of total expenses. Estimates are almost always set within one standard error of the survey results, taking into consideration other indicators of farm sector activities that affect the level of each expense in the year being estimated. The NASS publication Farm Production Expenses Annual Summary presents the annual estimates of farm production expenditures by U.S. farm production region and economic class for major expenses.

The first step in calculating production expenses is to produce an estimate of each production expense and total expenses for the United States. Estimates of each production expense and total expenses for the 5 regions, the 15 "core" States, and the group of remaining States in each region are then produced. Group estimates for the remaining States are the residual of the States' regional estimate less the estimates for the "core" States in the region. The intraregional distributor of the expenses for these States is a statistical source that is considered an adequate indicator of each State's agricultural activity. For example, the estimate of 2007 feed expenditures for the Atlantic region is $6.73 billion. The estimate for North Carolina, the only core State in the region, is $2.75 billion. The estimate for the remaining 15 States in the Atlantic region is $3.98 billion. This amount is distributed among the region's non-core States by each State's share of the sum of feed expenses in the 2007 Census of Agriculture. For example, Pennsylvania's share of the remaining region in the census is 23.0 percent. Multiplying this percentage times the feed estimate for the remaining States yields a feed estimate of $915.8 million. The actual shares of remaining States in each region for all expenses distributed in this manner are given in an Excel spreadsheet.

Since the ARMS is conducted only for the 48 contiguous States, estimates for Alaska and Hawaii have to be generated using other sources when ARMS is the basis for an estimate. Estimates for Alaska are based on the relationship of the State's values to the sum of the 48 contiguous States' values in a statistic. Hawaii's estimates are mainly based on the State's census of agriculture values adjusted by the change in its cash receipts. In the case of hired labor, the census value is adjusted by the results of the Farm Labor Survey. When no census expense exists, Hawaii's estimates are generated in a similar manner as Alaska's.

Statistical Bulletins Used in USDA's Net Farm Income Estimates for 2008 and succeeding years

   1. Citrus Fruits
   2. Crop Production - Annual Summary
   3. Noncitrus Fruits and Nuts
   4. Vegetables - Annual Summary
   5. Potatoes - Annual Summary
   6. Crop Values - Annual Summary
   7. Land Values
   8. Farms, Land in Farms, and Livestock Operations
   9. Cattle
  10. Hogs and Pigs
  11. Milk Production
  12. Sheep and Goats
  13. Chickens and Eggs - Annual Summary
  14. Honey
  15. Meat Animals Production, Disposition, and Income - Annual Summary
  16. Milk Production, Disposition and Income - Annual Summary
  17. Poultry Production and Value
  18. Mink