Update and Revision History
Farm income forecasts are updated three times each year, and historical estimates are revised as needed to reflect new credible administrative and survey data becoming available or when estimation procedures are revised. This page briefly describes the routine revision process for USDA farm income and balance sheet forecasts, and explains revisions to the historical income and balance sheet estimates when they occur.
Farm Income Forecasts Grow More Refined Over 19 Months
The periodic farm income forecasts and estimates (available in U.S. and State-level farm income and wealth statistics) published by ERS for a particular year (5 over a span of 19 months) can vary markedly from one release to the next. For example, the first forecast of 2015 income (in February 2015) will undergo refinement as new information becomes available. Release dates for updated forecasts correspond with the availability of seasonal data and annual survey results. For example, the August update of annual crop values benefits from preliminary output and yield numbers as reported by producers in the field. Likewise, because the prior-year's (2013's) forecast is converted to an estimate in August, production expenses are extrapolated from these new estimates and several months of current-year input price indices in future updates. Additional refinements in the August 2014 and the November 2014 releases will incorporate harvest, sales, and inventory data. The final forecast of 2014 farm income will be released in February 2015. Ultimately, an estimate of 2014 farm income will be published in August 2015.
Individual components of the farm income accounts adhere to different timetables and are subject to varying degrees of uncertainty. For instance, crop inventory adjustment is a residual component of total supply (production and beginning-of-year stocks) and use (domestic and exports). Farm household income is contingent on many factors (amount of off-farm work hours and wage rates) that transcend crop and livestock numbers. Government payments—which are a function of prices, production, eligibility rules, and ad hoc disaster legislation—are also hard to forecast with any certainty, and that uncertainty compounds the margin of error that measures like net cash income are subject to from first forecast to final estimate.
Periodic Revisions Improve the Accuracy of Historical Estimates
The following details updates and revisions to data (available in U.S. and State-level farm income and wealth statistics) as of February 10, 2015.
February 10, 2015
Release of the 2015 forecast and revision of the 2014 forecast. For 2012-13, insurance premiums and indemnities (including crop insurance premiums and indemnities) are reported as separate income and expense items. Prior to this release, and for all other years, insurance indemnities were included in other farm income and premiums were included in miscellaneous expenses.
December 12, 2014
On December 12, 2014, the ERS farm income estimates for 2008-2013 and the 2014 forecast, released on November 26, were revised to correct coding and data input sourcing problems in the underlying farm income database. Revisions also incorporate new data that became available following the November 26 release. While changes to individual State level estimates may be larger, at the U.S. level, these corrections and data revisions increased 2013 net farm income by 2 percent, to $129 billion. Also affected were the value of year-end inventories and related measures in the balance sheet, as well as production expenses, total value of production, gross and net value added, the value of inventory change, and their respective crop components in the income statement. Net farm income forecast for 2014 increased 0.4 percent, to $97.3 billion.
November 25, 2014
Beginning with the release of the 2012 Census of Agriculture in May of 2014, NASS announced the preparation and release of historical revisions to a number of important statistical products that would occur throughout the year. Most of these estimates are used in preparation of the farm sector value added and net income measures produced by ERS (see Documentation to the data product). The reports release included:
The result of incorporating the historical revisions for crop and livestock cash receipts was a relatively small reduction in livestock cash receipts (-0.18 to -1.33 percent) and a similar small percentage increase in crop receipts over the 2008-12 period (0.58 to 5.14 percent). Price and output revisions also resulted in changes for the value of crop and livestock production and estimated inventory changes. As a result, total value of agricultural production was revised downward by between 3-5 percent during 2008-12, with the largest reduction occurring in 2011. Changes to revenues from services and forestry (includes forest products sold, gross imputed rental value of farm dwellings, machine hire and custom work, and other farm related income) were also relatively minor for 2008-11. Forest products sold were the main component that changed in the rage of -3.41 to 1.12 percent. During 2012 all items in this category were updated to census values. There were no revisions to expenses during 2008-11.
August 26, 2014
Farm sector real estate asset values from 2008 to 2012 were revised in order to incorporate final estimate information from NASS on land values and land in farms. The value of machinery and motor vehicles assets was revised in 2012 to incorporate newly available census of agriculture information. Reflecting these changes, historical farm balance sheet values for farm sector equity (assets minus debt), and the sector debt-to-asset, debt-to equity, and equity-asset ratios were revised for data covering 2008-12.
February 11, 2014
Revisions were made to two data series since the November 2013 release. The amount of real estate debt held by Farmer Mac was previously shown as "not available" for 2002-06. However, as new information and analyst time became available, it was possible to provide these data. Additionally, a rounding error was corrected in the Net Farm Income series for 1950-59.
November 26, 2013
Following the August 2013 farm income and wealth statistics data release, errors were detected in several series. Many of the errors impacted national data, as well as data for each State. This is true for intermediate production expenses and labor expenses (2012), interest expenses (2008-12), real estate interest expenses (1988), nonreal estate interest expense (1971-80), and net rent to landowners (1971-80). Additionally, the value of inventory change for meat animals (2010-11) and real estate taxes excluding operator dwellings (1910-48) were found to include errors affecting only national (not State) data. The November 2013 release included corrected data.
August 27, 2013
Revised farm balance sheet estimates for 2002-11
Following the February 2013 update, a thorough review of the estimation process for USDA’s farm sector balance sheet was undertaken, and several changes were instituted to more accurately reflect farm sector debt. Estimation procedures were amended to improve handling of nonresponse to debt-related questions in the Agricultural Resource Management Survey (ARMS) and to recognize changes in the lending industry and associated administrative data over time.
Administrative data from all the major agricultural lenders are routinely adjusted using the most recent ARMS to estimate the portion of agricultural debt used for farm purposes. Comprehensive procedures were instituted to impute missing data in ARMS (due to respondent nonresponse) from 2002 to 2011, and these revised data were applied to estimate the share of lender-reported agricultural debt that was used for farm business purposes. Debt attributed to individuals and other lenders who do not routinely report farm lending activities was also re-estimated based on revised ARMS data. Finally, estimation procedures were amended to reflect Farmer Mac’s changing role in the farm debt market and to account for other changes in the availability of administrative data on agricultural lending. The impact of these changes was sizeable in some cases, as shown in the accompanying table.
Revised farm income estimates for 2008-11
The above-mentioned revisions to the farm balance sheet estimates affected estimated interest expenses for farm operations. These changes, in turn, affected estimates of net farm income. Revisions are ongoing, but the August 2013 release incorporates revisions to interest expenses and income estimates for 2008-11.