Farm Business Income

Average Net Cash Farm Income for U.S. Farm Businesses Forecast Down In 2021

Farm businesses account for less than half of U.S. farms, but they contribute more than 90 percent of the farm sector's value of production and hold most of its assets and debt. Farm businesses are farms that have annual gross cash farm income of at least $350,000 or smaller operations where farming is reported as the operator's primary occupation.

Average net cash farm income (NCFI) for farm businesses* is forecast at $91,800 in nominal terms in 2021, down 6.2 percent from 2020. Lower NCFI means less cash available to pay down debt, pay taxes, cover family living expenses, and invest. NCFI is not a comprehensive measure of profitability, however, because it does not account for changes in noncash income, including adjustments in farm inventory, accounts payable, accounts receivable, the imputed rental value of operator dwellings, and capital consumption.

Average NCFI is forecast to decrease in 2021 across almost all farming regions and most commodity specializations, largely because of lower levels of direct Government payments and higher expenses. For farm businesses specializing in cotton, which are forecast to see the largest decrease in average NCFI in 2021, lower cash receipts are also contributing to lower average NCFI. See data tables on farm business average net cash income, including: 

Average Net Cash Farm Income (NCFI) Outlook for Farm Businesses Varies by Specialization

The 2021 outlook is mixed for average net cash farm income for farm businesses specializing** in crop production. All crop farm businesses are expected to see government payments fall and expenses to rise in 2021. Higher cash receipts in 2021 for farm businesses specializing in wheat, corn, and soybeans are expected to lead to higher average NCFI in 2021; those specializing in cotton, specialty, and other crops are forecast to see average NCFI decline. Farm businesses specializing in cotton are expected to see the largest dollar ($77,300) and percentage decline (26.7 percent) in average NCFI because of lower government payments, higher expenses and lower cash receipts. Farm businesses specializing in corn are expected to see the largest dollar and percentage increase among crop commodities at $21,500 (12.5 percent) as increases in cash receipts are forecast to more than offset declines in government payments.

Average net cash farm income (NCFI) for farm businesses specializing in crop production, 2021F compared with 2020F
Farm specialization Average NCFI, 2021F Change in average NCFI, 2020F-21F
  Dollars Percent
Wheat $153,100 0.5
Corn $193,000 12.5
Soybeans $98,400 4.7
Cotton $211,800 -26.7
Specialty crops 1/ $215,400 -19.3
Other crops $71,100 -3.5
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 February 5, 2021.
1/ Specialty crops include fruits and tree nuts, vegetables, and nursery/greenhouse. 

For farm businesses specializing in animals/animal products, average NCFI in 2021 is forecast to decrease from 2020 for all specialization categories except hogs. The largest dollar and percentage decrease in average NCFI is for farms specializing in dairy, which is expected to fall by $71,500 (22.7 percent) to $243,300 per farm. 

Average net cash farm income (NCFI) for farm businesses specializing in animals/animal products production, 2021F compared with 2020F
Farm specialization Average NCFI, 2021F Change in average NCFI, 2020F-21F
  Dollars Percent
Cattle/calves $23,700 -6.3
Hogs $421,400 17.4
Poultry $137,400 -0.6
Dairy $243,300 -22.7
Other livestock $14,600 -13.6
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 February 5, 2021.

Average Net Cash Farm Income (NCFI) for Farm Businesses Forecast To Decrease in Almost All Regions in 2021

Regional performance of farm businesses can vary considerably because of the strong geographic concentration of certain production specialties. However, all resource regions (see the FAQ on ERS resource regions) except the Heartland are expected to see average NCFI decrease in 2021. Farm businesses in the Fruitful Rim are forecast to see the largest dollar and percentage decrease in average NCFI at $40,700 (20.1 percent) per farm. These expected decreases are due to a combination of lower Government payments and fruit/nut cash receipts plus higher expenses. Average NCFI in the Heartland is forecast to increase $10,900 (9.2 percent) per farm following the forecast increase in corn and soybean receipts.


*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"). Agricultural Resource Management Survey data for 2019 indicate that approximately 10 percent of U.S. farms are commercial, and 38 percent are intermediate. "Residence farms" comprise the remaining 52 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.