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 2014 income (in February 2014) 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 August 26, 2014.
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.