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. GCFI is forecast at $418 billion in 2018, versus $321 billion (inflation-adjusted 2018 dollars) in 2000, with the increase across time largely due to higher cash receipts. After increasing 3 percent in 2017, GCFI is forecast to decline 2.2 percent to $418 billion (over $9 billion lower than 2017) in 2018.
Gross farm income reflects the total value of agricultural output plus Government farm program payments. Net farm income (NFI)—which reflects income from production in the current year—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 decline almost 15 percent in 2018, to $65.7 billion, after increasing in 2017. Inflation-adjusted expenses are projected to increase slightly (1 percent) in 2018 after declining in each of the 3 prior years.