Q: How do the ERS farm income and wealth forecasts evolve from the first published forecast for a given calendar year?
On August 30, 2017, ERS released the data visualization, Charts of U.S. Farm Sector Forecast Evolution Over Time, which demonstrates the extent to which new data incorporated throughout a given calendar year improve forecast accuracy in the ERS Farm Income and Wealth Statistics data product. The visualization includes accuracy measures for net farm income, cash receipts, farm expenses, and farm assets. Currently, the visualization shows 5 full years of forecast releases, and will be updated over time. For a description of the revision process, see Farm Income and Wealth—From Forecast to Estimate Across 19 Months in Update and Revision History of the data product.
Q: How does ERS define the farm resource regions used in the farm business income summary findings?
Farm resource regions are defined using farm production regions, land resource regions, crop reporting districts, and farm characteristics. The regions are designated at the county level and therefore do not generally follow State boundaries. See the ERS report, Farm Resource Regions (AIB-760, August 2000) for more information, or download a table to link counties to the appropriate ERS Resource Region.
Q: Does ERS produce county-level data on farm sector income?
A: No, State-level is the most geographically disaggregated estimate produced by ERS. However, some published U.S. Government data on county-level farm income are available from other sources, although definitions can vary across data sources. The census of agriculture is conducted every 5 years by USDA and provides detailed data on the market value of agricultural products sold, farm production expenses, government payments, and income from farm-related sources. The census of agriculture data also provide a measure of net cash farm income. The data are available through the NASS-USDA Quick Stats data base and from Census publications. The U.S. Bureau of Economic Analysis publishes annual data on county-level net farm income accruing to proprietorship farms, corporations, and hired farm labor as part of their Local Area Personal Income statistics. Their Farm Income and Expense (CA45) tables additionally provide annual estimates of cash receipts from farm production, other farm income, production expenses, and the value of inventory change.
Q: What is included in the "Miscellaneous crops" and "All other animals and products" categories in the cash receipts tables?
A: The exact lists of commodities are not available because the source data from USDA-NASS is confidential in order to avoid disclosure of individual operations. However, many of the types of commodities included in the composite categories can be found in the census of agriculture estimates; comparing these census tables with the ERS cash receipt tables can provide some additional insight. For a given State, commodities included in the census of agriculture, but not explicitly listed by ERS, are most likely contained in the ERS composite groupings. Still, the resulting list of commodities will not be definitive as the census of agriculture tables include some aggregation as well.
Q: I noticed a new farm sector balance sheet report. How does this differ from the previous reports. What has changed?
A: Starting with the November 30, 2016 release, a new Farm Income and Wealth Statistics report, Current and noncurrent farm sector balance sheet (includes current and working capital ratios), was added to the data product. This report displays end-of-year farm sector balance sheet data from 2012 to 2016 (where data allow), broken down into four sections. The assets section includes data on both current assets (cash or assets that can be converted to cash relatively easily) and noncurrent assets which includes the value of real estate, machinery/vehicles, breeding animal inventory and investments in cooperatives. The farm sector debt section is also broken down into current debt and noncurrent debt for real estate and nonreal estate. Farm sector equity is listed and represents the net worth of the sector. The final section uses data on current assets and debt to calculate three separate measures of the liquidity of the farm sector, including the current (assets/debt) ratio, working capital, and the ratio of working capital to gross revenue. Starting with the February 2017 release, forecasts of these three measures are also included in the report.
Q: I noticed that ERS publishes a new Government program payment called Cotton Ginning Cost-Share. What is this program?
A: The Cotton Ginning Cost-Share (CGCS) program provides cost-share assistance payments to cotton producers with an ownership share in the 2015 cotton crop. The program was established under the statutory authority of the Commodity Credit Corporation Charter Act. The sign-up period for the program was June 30, 2016, through August 5, 2016. Eligible producers may receive a one-time cost-share payment based on their share of 2015 cotton acres reported to USDA’s Farm Service Agency multiplied by their regional payment rate. There are 4 regional payment rates equal to 40 percent of the average ginning cost for that production region. Cost-share payments are capped at $40,000 per individual or entity. The CGCS payments do not count against the 2014 Farm Bill payment limitations.
Q: I notice that the ranking reports and the commodity detail in the cash receipts table have been restored. Why was this change made?
A: ERS cash receipts use NASS data as a primary input, but in cases where it is necessary for NASS to suppress certain survey results to protect the confidentiality of survey respondents, ERS has developed a method for estimating the commodity detail that avoids the disclosure of private, confidential data (see Documentation for the Farm Sector Cash Receipts Estimates for additional information). As a result, we are able to publish more detailed cash receipt tables and ranking reports than previously.
Q: What does ERS use for their commodity price forecasts?
A: Our forecast price assumptions for eight commodities (wheat, corn, sorghum, barley, oats, rice, soybeans, and upland cotton) are based on average crop marketing-year commodity prices from the most recent World Agricultural Supply and Demand Estimates (WASDE) report. However, because not all commodities have a price forecast in WASDE, we also rely on ERS situation and outlook reports and subject matter experts to develop commodity price forecasts of our own. See New Method for Forecasting Cash Receipts for further information.
Q. Why are total and Federal commodity insurance premiums and indemnities reported as separate expense and income items in the "value added" report table?
A: The prior convention was to include insurance indemnities in the "other farm income" category while premiums were included in the "miscellaneous expenses" category. In February 2015, the data were broken out for all prior years for which data are available, as well as for the forecast year. The ERS customer base has shown an interest in having farm insurance information reported separately, so we now provide that information to the public. Since August 2016, the commodity insurance premium and indemnity data have been further decomposed into total and Federal components, and this level of detail is now calculated back to 2008.
Q: What is the difference between net cash and net farm income?
A: Net cash income includes only cash receipts and expenses; net farm income is net cash income plus the value of home consumption, changes in inventories, capital replacement, and implicit rent and expenses related to the farm operator's dwelling that are not reflected in cash transactions during the current year. As such, net cash income is generally less variable than net farm income.
Since only cash receipts and expenses are included, farmers can manage the timing of crop and livestock sales and of input purchases to stabilize the variability in their net cash income. Farmers can hold crops from large harvests to sell in the coming year when output may be lower and prices higher. As a consequence, net cash farm income can remain high in years when output is average or subpar. However, net cash income cannot be maintained for long without being replenished through production.
Q: What are the major changes in Federal programs under the 2014 Farm Act?
A: The 2014 Act repeals certain programs, continues some programs with modifications, and authorizes several new programs.
The Direct and Counter-Cyclical Program and Average Crop Revenue Election Program were repealed. The Tobacco Transition Program and the Milk Income Loss Contract Program ended in 2014. The Supplemental Revenue Assistance Program was not reauthorized.
Older programs that were continued mostly unchanged include the Marketing Assistance Loan Program and sugar loans. Others that were continued with some modifications include the Conservation Reserve Program, Conservation Stewardship Program, Biomass Crop Assistance Program, Environmental Quality Incentives Program, Noninsured Crop Disaster Assistance Program, Livestock Forage Disaster Program, Livestock Indemnity Program, Tree Assistance Program, and Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish.
New programs introduced in the 2014 Farm Act include Price Loss Coverage (PLC), Agricultural Risk Coverage (ARC), the Dairy Margin Protection Program, Cotton Transition Assistance Program, and Stacked Income Protection Plan. The latter two are for upland cotton, which will no longer be considered a covered commodity and thus not part of ARC or PLC. Upland cotton’s base acres are now classified as generic base acres and are eligible for reallocation to the remaining covered commodities.
For more information, see Agricultural Act of 2014: Highlights and Implications page.
Q: Are cash receipts reported by ERS identical to value of production reported by NASS?
A: The answer to this question depends on the commodity examined. For livestock and for certain crops (for which there is no Commodity Credit Corporation (CCC) program, no reductions for onfarm use of commodities, and no lag in calendar years between production and sale), the NASS and ERS estimates will be identical. ERS cash receipt estimates will differ from NASS value of production for commodities (1) where CCC placements occur, (2) where crop production is used on the farm (e.g., fed to livestock), and (3) where commodities are marketed across more than 1 calendar year.
Q: What are you using to convert nominal to real dollars?
A: We use the GDP chain-type price index, as published by the Federal Reserve (see St. Louis Federal Reserve website), to adjust nominal prices to 2017 values. When Federal Reserve data are unavailable, we use a forecast of the GDP chain-type price index from Oxford Economics.
Q: Is it possible for me to get a copy of all of the data contained in this release in a single file?
A: Yes. Please go to the data access page in order to download a .CSV file with the data. At this time, the file only lists the nominal values included in the reports.
Q: I would like to view charts and maps of these data, are they available?
A: Please see our data visualizations associated with the data product, including Charts and Maps About Your State, Charts and Maps of U.S. Farm Sector Balance Sheet Data, and Charts and Maps of U.S. Farm Income Statement Data.