U.S. farm sector profits forecast to increase in 2021
USDA’s Economic Research Service (ERS) forecasts inflation-adjusted net cash farm income (NCFI)—gross cash income minus cash expenses—to increase by $12.6 billion (10.5 percent) from 2020 to $133.0 billion in 2021. U.S. net farm income (NFI) is forecast to increase by $18.4 billion (18.7 percent) from 2020 to $116.8 billion in 2021. Net farm income is a broader measure of farm sector profitability that incorporates noncash items, including changes in inventories, economic depreciation, and gross imputed rental income. If this forecast is realized, NFI would be 24.2 percent above its 2000–20 average of $94.0 billion and the highest since 2013. NCFI would be 16.9 percent above its 2000–20 average of $113.8 billion and the highest since 2014. Driving these increases are cash receipts from farm commodities, which are projected to rise by $51.0 billion (13.5 percent) from 2020 to 2021, their highest level since 2014. Production expenses are expected to grow by $16.3 billion (4.4 percent) during the same period, somewhat moderating income growth. Additionally, direct Government payments to farmers are projected to fall by $20.2 billion (42.6 percent) in 2021. This decline follows record payments in 2020 and is largely due to lower anticipated payments from supplemental and ad hoc disaster assistance for Coronavirus (COVID-19) relief. Find additional information and analysis on ERS’s topic page for Farm Sector Income and Finances, reflecting data released December 1, 2021.
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