Farm Business Income

Net Cash Farm Income for U.S. Farm Businesses Forecast Flat in 2017

Farm businesses (farms with annual gross cash farm income before expenses of $350,000 or more, or smaller operations where farming is reported as the operator's primary occupation) account for less than half of U.S. farms, but contribute over 90 percent of the farm sector’s value of production and hold the majority of its assets and debt. Average net cash farm income after expenses (NCFI) is forecast at $102,000 for farm businesses* in 2017, down less than 1 percent from 2016. NCFI for the whole farm sector, by contrast, is forecast to increase about 4 percent.

Higher NCFI means more cash available to draw down debt, pay taxes, cover family living expenses, and invest. It is not a comprehensive measure of profitability, however, because it does not account for noncash income changes, including adjustments in farm inventory, accounts payable, accounts receivable, and capital consumption.

In contrast to the relative stability for all farm business, sizable changes to average NCFI are forecast for some commodity specializations and farming regions. Driven primarily by higher cash receipts, farm businesses specializing in cotton, hogs, and dairy are expected to realize double-digit growth in average NCFI in 2017. As a result, regions with higher concentrations of farms producing these commodities (eg., Northern Crescent and Prairie Gateway) are forecast to have the largest percentage growth in average net cash farm income.

Farm businesses are expected to incur higher expenses in 2017 for livestock purchases, interest expenses, and hired labor.

See data tables on farm business average net cash income, including: 

NCFI Expected To Decline for Most Crop Farm Business Types, Grow for Most Livestock Types

Average net cash farm income for farm businesses specializing** in most types of crop production—except for those producing cotton—is expected to decrease in 2017.

Average net cash farm income (NCFI) for farm businesses specializing in crop production, 2017F compared with 2016
Farm specialization Average NCFI, 2017F Change in average NCFI, 2016-2017F
  Dollars Percent
Wheat $43,900 -19.2
Corn $145,300 -10.9
Soybeans $118,200 -9.1
Cotton $479,200 41.9
Specialty crops $257,700 -13.6
Other crops $79,100 -6.6
Source: USDA, Economic Research Service, Farm Income and Wealth Statistics data product, Farm business average net cash income by commodity specialization and region. Data as of November 29, 2017.
  • After a substantial dropoff in income in 2014, cotton farm businesses are expected to continue the strong growth experienced since. Cotton farms in 2017 are expected to enjoy the largest increase in net cash income of any crop business due to higher cash receipts for upland/long-staple cotton.
  • Average NCFI for farm businesses specializing in corn and soybeans is expected to decrease by about 10 percent, driven by lower cash receipts—particularly for soybeans—and reduced Government payments.
  • The expectation of steady cash expenses paired with lower cash receipts and Government payments drives the 19-percent decline in average NCFI for farm businesses specializing in wheat.
  • Following a record of almost $300,000 in 2016, average NCFI for farm businesses concentrated in specialty crops (eg., fruits and vegetables, tree nuts, nursery crops) is forecast to fall more than 13 percent in 2017.

Average NCFI for farm businesses specializing in most types of livestock production is forecast to increase in 2017. 

Average net cash farm income (NCFI) for farm businesses specializing in animals/animal products production, 2017F compared with 2016
Farm specialization Average NCFI, 2017F Change in average NCFI, 2016-2017F
  Dollars Percent
Cattle/calf $35,500 8.6
Hogs $263,400 21.7
Poultry $111,900 1.3
Dairy $270,700 36.8
Other livestock $20,000 -2.9
Source: USDA, Economic Research Service, Farm Income and Wealth Statistics data product, Farm business average net cash income by commodity specialization and regionData as of November 29, 2017.
  • Dairy farms are expected to rebound in 2017 after declines in 2015 and 2016, and are forecast to experience the largest increase in NCFI of any livestock specialization—in both absolute ($72,800) and percentage (36.8 percent) terms—reflecting anticipated increases in both milk price and quantity sold.
  • For farm businesses specializing in hogs, higher hog prices and quantities are expected to drive average NCFI 21.7 percent higher in 2017, despite higher expenses for livestock purchases.
  • For poultry and egg farm businesses, higher prices are expected to increase overall cash receipts and drive the average NCFI forecast up 1.3 percent to $111,900 in 2017. 
  • Cattle/calf farm businesses are forecast to have higher (8.6 percent) NCFI in 2017, with higher output expected to raise cash receipts and more than offset increased spending on livestock inventory purchases.

Outlook for Average Net Cash Farm Income for Farm Businesses Across Regions Mixed in 2017

Regional performance varies considerably due to the strong geographic concentration of certain production specialties. Of the nine resource regions (see ERS resource regions), four are expected to see higher NCFI and five lower NCFI compared to 2016.  However, the expected changes in annual income for two regions (Eastern Uplands and Southern Seaboard) are less than $1,000.

  • Farm businesses in the Basin and Range are forecast to witness a 3.3-percent decrease in average NCFI to $46,900. For farm businesses in the Prairie Gateway, higher cattle/calf cash receipts drive the resulting increase in average NCFI of 5.8 percent.
  • In the Northern Great Plains, rising NCFI for the region’s cattle and calf businesses is offset by lower cash receipts from crops, contributing to an expected 1.9-percent decrease in average NCFI to $133,400 in 2017.
  • Average Mississippi Portal NCFI is expected to decline 5.4 percent in 2017 to $89,100, driven by higher expenses and lower crop receipts, even with the substantial growth in cotton cash receipts.
  • Heartland farm businesses—with expected lower corn and soybean cash receipts—are forecast to have an average NCFI of $128,900 in 2017, down 2.1 percent from 2016.
  • Average NCFI for farm businesses in the Eastern Uplands is expected up 3 percent to $17,000 in 2017. For the Southern Seaboard, average NCFI in 2017 is forecast up $100 (0.2 percent).
  • The standout performance forecast for dairy is expected to support farmers in many regions, contributing to a forecast 10-percent increase in average NCFI for the Northern Crescent to $71,800. Strong dairy sales also help mitigate the 6.1-percent decline in overall NCFI (to $218,500) for the Fruitful Rim,where farm businesses growing specialty crops are expected to see a 3.6-percent decline in NCFI in 2017.

*Farm businesses are defined as operations with gross cash farm income of over $350,000 (labeled "commercial") or smaller operations where farming is reported as the operator's primary occupation (labeled "intermediate"). Approximately 10 percent of U.S. farms are commercial and 30 percent are intermediate. "Residence farms" comprise the remaining 60 percent of operations. These are small farms operated by those whose primary occupation is something other than farming.

**Commodity specialization is determined by a farm business having at least 50 percent of the value of production from a particular commodity. Farm businesses often produce multiple commodities, so average net cash farm income statistics should not be interpreted as resulting solely from the production and sale of the commodity highlighted as the commodity specialization.