ERS Charts of Note

Thursday, August 18, 2022

In 2020, the median value of farm operator household income was $80,060, almost a fifth greater than that of all U.S. households ($67,521) but lower than the median among U.S. households reporting self-employment income ($89,492). Median total household income increased with farm size according to classifications by the USDA, Economic Research Service. Two types of small family farms had median household income below both the median for U.S. households and U.S. households with self-employment income: low-sales farms, those with gross cash farm income (GCFI) less than $150,000 and a principal operator who farms as a primary occupation, and retirement farms, GCFI less than $350,000 and a principal operator reporting having retired from farming. Low-sales and retirement farms account for about 45 percent of the 2 million farms in the United States. On the other hand, large family farms, GCFI of $1 million but less than $5 million, had a median income of almost $375,000, far exceeding the median for both all U.S. households and U.S. households with self-employment income. Very large family farms, GCFI of $5 million or more, had the highest median income at more than $1 million. Large and very large family farms account for about 3 percent of farms. Most farm households earn the majority of their income from off-farm sources such as wages, which are used to offset farming costs. This chart appears in the ERS report America’s Diverse Family Farms, 2021 published December 2021.

Friday, February 11, 2022

Working capital is calculated by subtracting current farm liabilities from current farm assets. It is a commonly used measure of liquidity, a business’s capacity to meet short-term obligations without disrupting normal operations. Larger farm operations generally require more working capital than smaller operations. In low-income years, farmers may draw down their working capital to pay their total business expenses. In high-income years, farmers are likely to accumulate working capital. Between 2012 and 2020, working capital for farms of all sizes fell as farmers depleted their savings and inventory to cope with lower revenues. During that period, farms with gross cash farm income (GCFI) of less than $100,000, saw the largest depletion of working capital at 72 percent. Working capital declined 50 percent for farms with a GCFI of $100,000 but less than $500,000, and 33 percent for farms with a GCFI of $500,000 or more. In 2020, farms with GCFI of $500,000 or more emerged with improved working capital, showing a 13 percent increase compared with 2019. However, working capital decreased 16 percent for farms with a GCFI of $100,000 but less than $500,000 and 25 percent for farms with less than $100,000 in 2020. Although government payments from Coronavirus (COVID-19) relief in 2020 appeared to have increased working capital for farms with GCFI of $500,000 or above, levels across all farm sizes were lower for 2015–20 compared with the 1996–2019 average level of working capital. This chart appears in the USDA, Economic Research Service report Financial Conditions in the U.S. Agricultural Sector: Historical Comparisons, published October 2019, and updated to reflect the most recent data from USDA’s 1996–2020 Agricultural Resource Management Survey (ARMS).

Friday, February 4, 2022

USDA’s Economic Research Service forecasts inflation-adjusted U.S. net cash farm income (NCFI)—gross cash income minus cash expenses—to increase by $12.6 billion (9.9 percent) to $139.0 billion in 2021 and then decrease by $2.9 billion (2.1 percent) to $136.1 billion in 2022. U.S. net farm income (NFI) is forecast to increase by $20.7 billion (20.1 percent) to $123.4 billion in 2021 and then decrease by $9.7 billion (7.9 percent) to $113.7 billion in 2022. 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 these forecasts are realized, both NCFI and NFI would remain above their respective 2001–20 averages in 2022. Underlying these forecasts, cash receipts for farm commodities are projected to rise by $13.7 billion (3.1 percent) to $461.9 billion in 2022, their highest level since 2014. During the same period, production expenses are expected to increase by $5.9 billion (1.5 percent) to $411.6 billion in 2022, offsetting some of this income growth. Additionally, direct Government payments to farmers are projected to fall by $16.4 billion (58.5 percent) from 2021 levels to $11.7 billion in 2022, largely due to lower anticipated USDA and non-USDA payments for Coronavirus (COVID-19) pandemic assistance. Find additional information and analysis on the USDA, Economic Research Service’s topic page for Farm Sector Income and Finances, reflecting data released on February 4, 2022.

Tuesday, January 18, 2022

In 2020, most of the values of cotton (62 percent), dairy (73 percent), and specialty crops (57 percent) were produced on large-scale family farms. USDA defines a family farm as one in which the principal operator and related family own the majority of the assets used in the operation. Large-scale family farms are those with an annual gross cash farm income of $1 million or more. However, small family farms produced the bulk of hay production (59 percent) and poultry and egg output (49 percent) in 2020. Poultry operations are often classified as “small” because most output is under a production contract arrangement, with a contractor paying a fee to a farmer who raises poultry to maturity. Additionally, more than one-quarter of beef production occurred on small family farms that generally have cow/calf operations. Another 42 percent of beef production occurred on large-scale family farms, which are more likely to operate feedlots. Midsize family farms production ranges from 8 to almost 30 percent of value of production. Nonfamily farms produce the smallest share of the value of production for most commodities. Of all the commodities, nonfamily farms contribute the most to specialty crop production at 27 percent. This chart is found in the Economic Research Service report, America’s Diverse Family Farms: 2021 Edition, released December 2021.

Wednesday, December 1, 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.

Wednesday, November 10, 2021

In 2020, U.S. family farm households received $4.3 billion in Federal assistance during the Coronavirus (COVID-19) pandemic from Economic Impact Payments (EIP) (also known as stimulus payments). USDA, Economic Research Service (ERS) researchers used data from the most recent available 2019 Agricultural Resource Management Survey on farm households’ adjusted gross income and household composition to estimate the average EIP disbursed. The estimated average was $924, $2,408, and $2,466 for single, head of household, and joint filers, respectively. This disparity partly reflects the lower income thresholds for single households, which resulted in some not receiving the maximum EIP and others not receiving EIP at all. Additionally, since unmarried people with dependents were assumed to file as head of household, these households were estimated to have received an additional $500 per dependent. Among family farm households, ERS researchers estimated that 18 percent of single filers did not receive EIP, compared with 17 percent of head of household filers, and 13 percent of joint filers in 2020. In April and May 2020, U.S. households of all types—farm or otherwise—received more than $266 billion from the EIP program. This chart appears in the Amber Waves feature “U.S. Agriculture Sector Received an Estimated $35 Billion in COVID-19 Related Assistance in 2020,” released September 2021.

Wednesday, October 27, 2021

Errata: On November 9, 2021, the chart and text were revised to clarify that the Paycheck Protection Program eligibility simulation was carried out on both commercial and intermediate farm operations. No other data or findings are changed.

As part of its response to the Coronavirus (COVID-19) pandemic, the U.S. Federal Government implemented the Paycheck Protection Program (PPP). Agricultural producers could use forgivable loans from this program to help keep employees on payroll and offset some of their operating costs. The maximum PPP loan amount was 2.5 times the monthly average profit plus payroll and eligible overhead expenses, such as the employer’s share of insurance payments and unemployment taxes. If used on eligible expenses within the first 24 weeks of disbursement, PPP loans were fully forgiven. According to data from USDA’s 2019 Agricultural Resource Management Survey (ARMS), 72 percent of all farm businesses (operations with gross cash farm income of more than $350,000 or smaller operations where farming is reported as the operator's primary occupation) had either positive net income or positive payroll, which met the two most important eligibility requirements to apply for PPP loans. Individual Small Business Administration (SBA) loan data indicated that almost 121,000 farm operations applied for a total of $6.0 billion in PPP loans in 2020. That accounted for 17 percent of presumed-eligible farm businesses based on the 2019 ARMS. Out of the total PPP loans that was disbursed to farm operations in 2020, $3.9 billion (65 percent) went to crop operations, and the remaining $2.1 billion (35 percent) went to livestock operations. This chart appears in the Amber Waves finding “U.S. Producers Received Almost $6.0 Billion From the Paycheck Protection Program in 2020,” released October 2021.

Wednesday, October 6, 2021

A proposal to change the way capital gains are taxed at death would affect family farm estates differently according to the size of the farm. Under current law, most inherited assets receive a step-up in basis, which means the tax basis—the amount for determining gain or loss—of property transferred to an heir at death is increased to its current fair market value at the date of death, eliminating any capital gains tax liability on those inherited gains. The change, which was included in the American Families Plan (AFP), would end stepped-up basis for gains above $1 million for the estates of individuals or $2 million for married couples. Gains above these exemption amounts would be subject to tax at death. However, the transfer of a family farm to a family member who continues the operation would not result in a tax at death. Farm and business assets exceeding the exemption amounts would receive a carry-over basis deferring capital gains tax until the assets are sold, or until the farm is no longer family owned and operated. USDA, Economic Research Service (ERS) researchers, using modeling to evaluate potential effects of the AFP proposal, found that as family farm size increased, the estimated share of estates owing no tax at death and receiving stepped-up basis on all assets decreased, while the estimated share of estates that would receive carry-over basis increased. For small farm estates, with gross cash farm income (GCFI) less than $350,000, 83.4 percent would owe no capital gains tax at death and would receive a stepped-up basis on all assets, resulting in no change to their capital gains tax liability. Under the ERS model, that share would drop to 34.2 percent for midsize farms (those with GCFI of $350,000 to $1 million), 20.4 percent for large farms (with GCFI of $1 million to $5 million), and 3.6 percent for very large farms (with GCFI of more than $5 million). Some estates would be taxed on nonfarm gains at death and potentially could owe deferred taxes on farm gains if the heirs stop operating the farm. For those estates, the estimated share increased from 1.1 percent for small farms to 2.5 percent for very large farms. Other estates would not have to pay tax at death but could see deferred taxes on farm gains if the heirs stop operating the farm. For that group, the estimated share increased from 15.5 percent for small farms to 93.9 percent for very large farms. This chart can be found in the ERS report The Effect on Family Farms of Changing Capital Gains Taxation at Death, published September 2021.

Wednesday, September 22, 2021

The American Families Plan (AFP) that President Joe Biden announced in April 2021 included a proposal to make accumulated gains in asset value subject to capital gains taxation when the asset owner dies. Under current law, asset value gains can be passed on to heirs without being subject to capital gains taxation because the value of the assets are reset to the fair market value at the time of inheritance. This adjustment in asset valuation, known as a “stepped-up basis,” eliminates capital gains tax liabilities on any gains incurred before the assets were transferred to the heirs. AFP also included a provision that would exempt from capital gains taxes $1 million in gains for the estates of individuals and $2 million in gains for the estates of married couples, as well as for gains on a personal residence of $250,000 for individuals and $500,000 for married couples. Gains above these exemption amounts would be subject to tax at death. However, the transfer of a family farm to a family member who continues the operation would not result in a tax upon the death of the principal operator. Under the proposal, any remaining farm and business gains above the exemption amount would receive a “carry-over basis” that effectively defers any capital gains tax until the assets are sold or until the farm is no longer family-owned and operated. Using 2019 Agricultural Resource Management Survey data, USDA, Economic Research Service (ERS) researchers estimated that of the 1.97 million family farms in the United States, 32,174 estates would result from principal operator deaths in 2021. From these farm estates, the ERS model used to evaluate potential effects of the AFP proposal estimated that heirs of 80.7 percent of family farm estates would have no change to their capital gains tax liability upon death of the principal operator. Heirs of 18.2 percent of family farm estates would not owe taxes at the time of the principal operator’s death but could be subject to a future potential capital gains tax obligation on inherited farm gains if the heirs stop farming. Heirs of 1.1 percent of estates would owe tax on nonfarm gains upon death of the principal operator and have a future potential capital gains tax obligation resulting from inherited farm gains if the heirs stop farming. This chart can be found in the ERS report The Effect on Family Farms of Changing Capital Gains Taxation at Death, published September 2021.

Thursday, September 2, 2021

USDA’s Economic Research Service forecasts inflation-adjusted net cash farm income (NCFI)—gross cash income minus cash expenses—to increase by $19.8 billion (17.2 percent) from 2020 to $134.7 billion in 2021. U.S. net farm income (NFI) is forecast to increase by $15.0 billion (15.3 percent) from 2020 to $113.0 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 20.4 percent above its 2000–20 average and would be the highest since 2013. NCFI would be 18.9 percent above its 2000–20 average and would be the highest since 2014. Underlying these forecasts, cash receipts for farm commodities are projected to rise by $51.2 billion (13.8 percent) from 2020 to 2021, their highest level since 2015. Production expenses are expected to grow by $12.9 billion (3.5 percent) during the same period, somewhat moderating income growth. Additionally, direct Government payments to farmers are expected to fall by $19.3 billion (40.8 percent) in 2021 compared with 2020’s record high payments. This decline is largely caused by lower anticipated payments from supplemental and ad hoc disaster assistance for Coronavirus (COVID-19) relief. Find additional information and analysis on the USDA, Economic Research Service’s topic page for Farm Sector Income and Finances, reflecting data released on September 2, 2021.

Friday, August 6, 2021

Family farms are any farm organized as a sole proprietorship, partnership, or family corporation—and accounted for 98 percent of all U.S. farms in 2019. Family farm households received Coronavirus (COVID-19) related financial assistance from multiple Federal sources, including Economic Impact Payments (EIP) and Federal Pandemic Unemployment Compensation (FPUC). These payments provided farm households with an immediate injection of cash to spur demand and mitigate the economic downturn. The full EIP amounted to $1,200 for individuals or $2,400 for couples filing jointly, with an additional $500 per dependent. To qualify for a full stimulus payment, joint filers, heads of household, and all other tax-filing individuals must have had an adjusted gross income (AGI) of less than $150,000, $112,500, and $75,000, respectively, based on their 2018 or 2019 taxes. According to data from USDA’s 2019 Agricultural Resource Management Survey (ARMS), the median married and unmarried household may have received an increase in one month’s total household income of 30 percent and 24 percent, respectively, as a result of EIP. Researchers from USDA, Economic Research Service (ERS) also estimated that family farm households received a total of $4.3 billion from EIP, with 84 percent going to married households. FPUC provided $600 per week (March 29, 2020 to July 25, 2020) to those who were unemployed during the COVID-19 pandemic (in addition to existing State unemployment benefits). Many farm households rely on off-farm employment, with 71 percent having one or more household members who earned an off-farm salary or wages in 2019. ERS researchers used county-level unemployment data from the U.S. Bureau of Labor Statistics to estimate the average FPUC payment at $996 per household and the total for all farm households at $1.3 billion. In total, EIP and FPUC provided $5.6 billion in assistance to farm households in 2020. Family farm households also received COVID-19 related assistance from other Federal sources—including the Coronavirus Food Assistance Program (CFAP, $23.7 billion) and the Paycheck Protection Program (PPP, $5.9 billion). This chart is based on data from the ERS data product ARMS Farm Financial and Crop Production Practices, updated May 2021.

Wednesday, July 21, 2021

Errata: On July 28, 2021, the chart was revised to correct an error in presentation. No other data or text were affected.

Government payments to farm operator households totaled $14.8 billion in 2019, based on data from USDA’s Agricultural Resource Management Survey. More than 30 percent of about 1.97 million U.S. farms received some Government payments that year, with an average payment of $24,623. The distribution of payments varied by farm type, which USDA’s Economic Research Service defines based on gross cash farm income (GCFI) and operator type. About 74 percent of commercial farms (those with $350,000 or more in annual GCFI) received Government payments in 2019, with an average payment of $84,775. By comparison, about 31 percent of intermediate farms (less than $350,000 in annual GCFI and a principal operator whose primary occupation is farming) received Government payments, with an average payment of $11,731. About 24 percent of all residence farms (less than $350,000 in annual GCFI and a principal operator who is retired from farming or has a primary occupation other than farming) received Government payments, with an average payment of $8,147. The distribution of payments also varied by the type of Government program. Across programs, average payments were always highest for commercial farms and typically lowest for residence farms, with intermediate farms in the middle. For example, average countercyclical payments in 2019 were $28,093 for commercial farms, compared with $5,800 and $2,660 for intermediate and residence farms, respectively. The only exception was in conservation payments, where intermediate farms had the lowest average payments. This chart appears in the July 2021 Amber Waves finding, Commercial Farms Received the Most Government Payments in 2019. For more information on the Federal programs discussed above, visit the topic page for Farm & Commodity Policy.

Wednesday, June 23, 2021

Farm households earn income from both farm operations and off-farm sources, such as off-farm employment, pensions, and capital gains. In 2019, more than half (51 percent) of all U.S. farm households had positive net returns, where total revenue from farming exceeded total costs. Farms with higher sales had a larger share of households with positive farm income. For example, 39 percent of farm households with annual gross sales less than $10,000 had positive farm income, compared with 85 percent of farms with sales of $1 million or more. At the same time, 56 percent of households operated the smallest farms with sales of less than $10,000, compared with 4 percent operating the largest ones with annual sales of $1 million or more. Households operating larger farms relied more on income from farming than households operating smaller farms. For instance, households that operated farms with sales of $1 million or more—and that had net positive returns—earned a median share of 87 percent of their income from farming. For those with sales less than $10,000, that median share was 5 percent. This chart is based on data from the ERS data product ARMS Farm Financial and Crop Production Practices, updated December 2020.

Friday, May 21, 2021

Liquidity is the ability to convert assets to cash quickly to satisfy short-term obligations without the assets losing material value. Researchers at the USDA, Economic Research Service (ERS) examined two measures of the U.S. farm sector’s liquidity: working capital and the times interest earned ratio. Working capital measures the amount of cash available to fund operating expenses after paying off debt to creditors due within 12 months (current debt). ERS forecasts U.S. farm sector working capital in 2021 at $74.3 billion, a 13.6-percent decrease from 2020 after adjusting for inflation. If realized, this would be the largest decline since 2016. By comparison, the times interest earned ratio measures the farm sector’s ability to service debt out of net farm income, so a higher times interest earned ratio indicates greater ease in making debt payments. ERS forecasts the times interest earned ratio will decrease from 9.2 in 2020 to 8.4 in 2021, after a forecasted increase in 2020. The weakening of this ratio in 2021 reflects the forecast decline in net farm income as well as the expected increase in interest expenses. Still, the times interest earned ratio is forecast to remain above 2014-19 levels. This chart appears in the ERS Amber Waves finding, Farm Sector Liquidity Forecast to Decline in 2021, released March 2021.

Friday, May 14, 2021

USDA, Economic Research Service (ERS) provides estimates, forecasts, and projections for net cash farm income and net farm income—two major profitability indicators of the financial health of the U.S. agricultural sector. 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. Net cash farm income, on the other hand, includes only gross cash income minus all cash expenses. Net cash farm income and net farm income estimates will not be available for 2020 until September 2021, but forecasts are available. In 2020, ERS forecasts net farm income to be at $123 billion, which was $31 billion more than the 20-year average and $38 billion (or 44 percent) higher than in 2019. ERS forecasts for net cash farm income in 2020 is close to $139 billion. This amount was $43 billion more than the 20-year average from 2000-2019 and $27 billion (or 25 percent) more than in 2019. ERS forecasts that both indicators increased significantly in 2020 as direct government payments to farm operations reached their highest level ever because of COVID-19 related aid, such as the Coronavirus Food Assistance Programs (CFAP) and the Paycheck Protection Program (PPP). In 2021, ERS projects direct government payments to fall, pushing down both profitability indicators. Further projections estimate these profitability indicators to rise in 2022, then level off through 2030 because of a projected increase in production expenses. In 2030, both measures of farm income are projected to be lower than their 2020 forecasts. Net farm income is projected to remain slightly higher than the recent 20-year average, but net farm cash income is projected to be lower for 2021-30. This chart is based on data found in the ERS data products Farm Income and Wealth Statistics and Agricultural Baseline Database, updated February 2021.

Friday, May 7, 2021

In 2020, the Federal Government provided assistance to farm operations that experienced losses because of the Coronavirus (COVID-19) pandemic. The aid came in the form of loans from the Paycheck Protection Program (PPP) and payments from the two iterations of the Coronavirus Food Assistance Program (CFAP), programs 1 (CFAP 1) and 2 (CFAP 2). PPP, administered by the U.S. Small Business Administration, provided loans to small businesses to help them keep their workers employed during the pandemic. CFAP, administered by USDA’s Farm Service Agency, provides assistance to agricultural producers whose operations were directly affected by the pandemic. The PPP loan amount each farm business could receive depended on their income and employment costs, while CFAP payments were based on commodity prices, previous sales, acres, and/or inventory. USDA, Economic Research Service (ERS) researchers compared the total amount of PPP loans plus CFAP payments received in each State in 2020 to its 2019 value of production (estimates of the 2020 value of production are not yet available). Massachusetts received the largest share of total loans and payments relative to the State’s 2019 value of production (12.2 percent), and South Dakota came in second at 11.1 percent of its 2019 production. California, which had the highest value of agricultural production in 2019, received the largest total amount of PPP and CFAP aid at $3.1 billion. Iowa, which had the second highest level of agricultural production in 2019, was No. 2 with $2.4 billion in assistance. This chart used data found in the ERS data product Farm Income and Wealth Statistics, Farm sector financial indicators, State rankings, updated February 2021.

Monday, April 26, 2021

Farm households obtain income from farming and off-farm income, such as salaries, pensions, and investment interest. Among farm businesses, off-farm wage and salary income varied by commodity specialization. For general crops, beef cattle, and poultry operations, average off-farm wage and salary income contributed more than half of total household income. Dairy operations, by comparison, averaged $37,339 in off-farm wage and salary income, the lowest of any commodity. Dairy operations require extensive and ongoing time commitments, so managing a dairy farm rarely permits an operator to work many hours off-farm. As a result, dairy farm households relied primarily on income from the operation, an average of $148,831 in 2019. This chart is based on data from the ERS data product ARMS Farm Financial and Crop Production Practices, updated December 2020.

Wednesday, April 14, 2021

Created in 1916, the Federal estate tax is a tax on the transfer of property from a deceased person to their heirs at death. Legislation enacted over the last several years has greatly reduced the Federal estate tax by increasing the exemption amount from $675,000 in 2000 to $11.58 million in 2020. Under the present law, the estate of a person who owns assets above the exemption amount at death must file a Federal estate tax return. However, only returns that have an estate above the exemption after deductions for expenses, debts, and bequests to a surviving spouse or charity are subject to tax at a rate of 40 percent. Researchers from USDA, Economic Research Service (ERS) estimated that about 31,000 principal farm operators died in 2020. Of those estates, an estimated 189 (0.6 percent) will be required to file an estate tax return—and only 50 (0.16 percent) will owe Federal estate tax. Total Federal estate tax liabilities from farm estates owing taxes were forecasted to be $130.2 million in 2020 from a total estimated estate value of $56.3 billion. This chart appears in the April 2021 Amber Waves finding, “Less Than 1 Percent of Farm Estates Owed Federal Estate Taxes in 2020.”

Friday, March 5, 2021

Farm households often rely on off-farm employment to provide other benefits, including health insurance, and to supplement their income. Loss of off-farm employment because of the COVID-19 pandemic can strain a farm household’s financial well-being. In 2019, 50 percent of all U.S. family farm households had the principal operator, the principal operator’s spouse, or both the principal operator and spouse working in an off-farm, wage-earning job. The shares of households working off-farm varied by the farm’s economic class. For small farms with less than $100,000 in annual gross farm sales, 51 percent had the principal operator, the spouse, or both work off the farm. By comparison, 34 percent of large farms with annual gross farm sales of $1 million or more had the principal operator, the spouse, or both work off the farm. As the farm’s sales size increases, the share of principal operators working off the farm decreased. Smaller family farms generally don’t earn enough from farm sources alone to cover household living expenses, whereas larger farms usually require increasingly more on-farm labor and management resources. While this information predates the COVID-19 pandemic, it can provide insights into the potential impact of decreased employment rates, which can result in the loss of off-farm employment for many farm households. This chart updates data found in the USDA, Economic Research Service report, America’s Diverse Family Farms, 2019 Edition, released December 2019.

See also: Farms and Farm Households During the COVID-19 Pandemic

Friday, February 5, 2021

USDA’s Economic Research Service (ERS) forecasts inflation-adjusted U.S. net cash farm income (NCFI, gross cash income minus cash expenses) to increase $26.6 billion (23.7 percent) in 2020, and then decrease $10.4 billion (7.5 percent) to $128.3 billion in 2021. U.S. net farm income (NFI) is forecast to increase $37.8 billion (44.2 percent) in 2020 and then decrease $12.0 billion (9.7 percent) to $111.4 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 realized, this would be the first year NFI has fallen since 2016. However, both NCFI and NFI would remain above their respective 2019 levels as well as above their respective averages over the 2000-19 period. Underlying these forecasts, cash receipts for farm commodities are projected to rise $13.6 billion (3.6 percent) in 2021. Direct Government payments to farmers are expected to fall $21.8 billion (46.3 percent) after increasing $24 billion (104.0 percent) in 2020. This decline is largely caused by lower anticipated payments from supplemental and ad hoc disaster assistance for COVID-19 relief. Find additional information and analysis on the ERS topic page for Farm Sector Income and Finances, reflecting data released on February 5, 2021.