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 cash receipts, farm-related income, and Government farm program payments. After increasing 2.5 percent in 2017, GCFI is forecast to decline by 0.8 percent to $423 billion (over $3 billion lower in 2018 than 2017 in inflation-adjusted 2018 dollars). Since 2000, GCFI has increased nearly $102 billion from $321 billion, with changes across time largely due to growth in cash receipts.
Gross farm income reflects the total value of agricultural production in the current year (including farm-related income) plus Government farm program payments. Net farm income (NFI) is calculated by subtracting farm expenses from gross farm income. NFI considers both cash and noncash income and expenses and adjusts for changes in crop and animal/animal product inventories. Inflation-adjusted net farm income is forecast to decline over 14 percent in 2018, to $66.3 billion, after increasing in 2017. Inflation-adjusted expenses are projected to increase almost 1.8 percent in 2018 after declining in each of the 3 prior years.