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 cash income, and Government farm program payments. GCFI is forecast at $600.0 billion in calendar year 2022, versus $343.3 billion (inflation-adjusted 2022 dollars) in 2002, with the increase across time primarily due to higher cash receipts. If forecasts are realized, GCFI would increase 14.3 percent in 2022 relative to 2021 and be at its highest level on record.
Gross farm income reflects the total value of agricultural output plus Government farm program payments. Net farm income (NFI)—which reflects income after expenses from production in the current year—is calculated by subtracting farm expenses from gross farm income. NFI considers both cash and noncash income as well as expenses and accounts for changes in commodity inventories. Inflation-adjusted net farm income is forecast to increase 7.2 percent in calendar year 2022 relative to 2021, to $160.5 billion and be at its highest level since 1973. Inflation-adjusted farm production expenses are projected to increase 11.8 percent in 2022.
Crop cash receipts totaled $240.0 billion in the calendar year 2021. Receipts from corn and soybeans accounted for $120.2 billion (50.1 percent) of the total.
Cash receipts from animals and animal products totaled $195.8 billion in the calendar year 2021. Cattle/calf receipts accounted for $72.9 billion (37.2 percent) of that total, while poultry and eggs receipts accounted for $46.1 billion (23.5 percent), and dairy receipts accounted for $41.8 billion (21.3 percent).