Farm Business Income

Average Net Cash Farm Income for U.S. Farm Businesses Forecast Up In 2020

Farm businesses account for less than half of U.S. farms, but 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 over $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 $82,600 in nominal terms in 2020, up 4.8 percent from 2019. Higher NCFI means more 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 increase in 2020 across most farming regions and all crops specializations, largely due to higher levels of direct government payments and lower expenses. However, farm businesses in Heartland and Prairie Gateway are forecast to see a decrease in average NCFI in 2020, driven primarily by lower cash receipts. In addition, nearly all farm businesses specializing in livestock are forecast to see a decrease in average NCFI in 2020, also driven by lower cash receipts.

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

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

Average net cash farm income for farm businesses specializing** in all types of crop production is forecast to increase in 2020. All crop farm businesses are expected to benefit from higher government payments in 2020 compared with 2019. Those impacts are greatest for farm businesses specializing in cotton, which are expected to see the largest dollar and percentage increase in average net cash farm income at $64,100 and 25.4 percent.

Average net cash farm income (NCFI) for farm businesses specializing in crop production, 2020F compared with 2019
Farm specialization Average NCFI, 2020F Change in average NCFI, 2019-20F
  Dollars Percent
Wheat $125,200 16.7
Corn $153,800 7.4
Soybeans $91,700 18.2
Cotton $316,400 25.4
Specialty crops 1/ $234,200 19.2
Other crops $64,400 13.4
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 September 2, 2020.
1/ Specialty crops include fruits and tree nuts, vegetables, and nursery/greenhouse. 

For farm businesses specializing in animals/animal products, average NCFI in 2020 is forecast to decrease from 2019 for all specialization categories except other livestock. The largest dollar and percent decreases in average NCFI is for farms specializing in hogs, which is expected to drop by $121,100 and 35.5 percent to $220,500 per farm. Average NCFI for dairy farms is forecast to decrease by $24,700 to $235,900 per farm. Both types of farm businesses are expected to see declines in net cash farm income because of lower cash receipts.​

Average net cash farm income (NCFI) for farm businesses specializing in animals/animal products production, 2020F compared with 2019
Farm specialization Average NCFI, 2020F Change in average NCFI, 2019-20F
  Dollars Percent
Cattle/calves $15,700 -19.9
Hogs $220,500 -35.5
Poultry $129,200 -8.8
Dairy $235,900 -9.5
Other livestock $13,800 13.1
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 September 2, 2020.

Average Net Cash Farm Income (NCFI) for Farm Businesses Forecast to Increase Across All Regions in 2020

Regional performance of farm businesses can vary considerably because of the strong geographic concentration of certain production specialties. Nonetheless, all resource regions (see the FAQ on ERS resource regions) except Heartland and Prairie Gateway are expected to see average NCFI increase in 2020 by 0.4 percent or more. Farm businesses in the Mississippi Portal are forecast to see the largest dollar and percentage increase in average NCFI at $124,600 per farm and 20.5 percent. These expected increases are largely because of higher government payments.


*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.

Last updated: Wednesday, September 02, 2020

For more information, contact: Farm Income Team