Farming and Farm Income
American agriculture and rural life underwent a tremendous transformation in the 20th century. Early 20th century agriculture was labor intensive, and it took place on many small, diversified farms in rural areas where more than half the U.S. population lived. Agricultural production in the 21st century, on the other hand, is concentrated on a smaller number of large, specialized farms in rural areas where less than a fourth of the U.S. population lives. The following material provides an overview of these trends, as well as trends in farm sector and farm household incomes.
Gross cash farm income (GCFI) is annual income before expenses and includes commodity cash receipts, farm-related income, and Government farm program payments. GCFI is forecast at $429 billion in 2020, versus $329 billion (inflation-adjusted 2020 dollars) in 2000, with the increase across time largely due to higher commodity cash receipts. Since 2016, GCFI has been relatively stable.
Gross farm income reflects the total value of agricultural output plus Government farm program payments. Net farm income (NFI) reflects income after expenses from production in the current year and is calculated by subtracting farm expenses from gross farm income. NFI considers both cash and noncash income and expenses. Inflation-adjusted net farm income is forecast to increase 21.7 percent in 2020, to $102.7 billion. Inflation-adjusted farm production expenses are projected to decrease 2.1 percent in 2020.