Farm Business Income

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

Farm businesses (farms with annual gross cash farm income of over $350,000 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 (NCFI) is forecast at $108,800 for farm businesses* in 2017, up 5.8 percent from 2016. This is in line with the NCFI for the whole farm sector, which is also forecast to increase by about 13 percent. If realized, 2017 would be the 4th highest average NCFI for farm businesses ever.

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.

The 5.8-percent increase forecast in 2017 more than offsets the 3.7-percent decrease in 2016, bringing expected average NCFI above 2015 levels.

This increasing forecast for all farm businesses masks substantial variation among commodity specializations and farming regions. Driven primarily by higher cash receipts, farm businesses specializing in cotton, wheat, cattle/calves, hogs, and dairy are expected to realize double-digit growth in average NCFI in 2017. As a result, the regions of the country with higher concentrations of farms producing these commodities (ex., 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: 

Growth in NCFI Expected for all Farm Business Types Other Than Specialty Crops

Average net cash farm income for farm businesses specializing** in most types of crop production—except for those producing specialty crops—is expected to increase in 2017. Corn and soybean specialized farm businesses’ average NCFI is expected to increase less than 3 percent.

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 $61,600 13.4
Corn $167,600 2.8
Soybeans $133,500 2.6
Cotton $442,800 31.1
Specialty crops $254,300 -14.8
Other crops $87,200 3.0
Source: USDA, Economic Research Service, Farm Income and Wealth Statistics data product, Farm business average net cash income by commodity specialization and region.

After a substantial dropoff in income in 2014, cotton farm businesses are expected to continue the strong growth experienced since then with the largest increases in average net cash income in 2017 of any crop specialized farm business due to higher cash receipts expected for upland/long-staple cotton.

Average NCFI for farm businesses specializing in livestock production is forecast to increase in 2017, but the magnitude depends on the primary specialty. 

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 $37,900 15.9
Hogs $297,700 37.6
Poultry $113,000 2.3
Dairy $281,400 42.2
Other livestock $20,500 -0.5
Source: USDA, Economic Research Service, Farm Income and Wealth Statistics data product, Farm business average net cash income by commodity specialization and region.
  • Dairy farms are expected to rebound in 2017 after declines in 2015 and 2016, and are forecast to experience the largest increase in NCFI—in both absolute ($83,500) and percentage (42.2 percent) terms—of any commodity, 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 37.6 percent higher despite higher expenses for livestock purchases.
  • For poultry and egg farm businesses, higher prices—particularly for eggs—are expected to increase overall cash receipts and drive the average NCFI forecast up 2.3 percent to $113,000 in 2017. 
  • Cattle/calf farm businesses are forecast to have higher (15.9 percent) NCFI in 2017, with higher output expected to improve cash receipts and more than offset increased spending on livestock inventory purchases.

Average Net Cash Farm Income for Farm Businesses Higher Across Most Regions 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), only the Fruitful Rim is forecast to have lower average NCFI in 2017.

  • Farm businesses in the Basin and Range are forecast to experience a 1.6-percent increase in average NCFI to $49,300, rebounding from a double-digit decline in 2016. For farm businesses in the Prairie Gateway, higher cattle/calf cash receipts drive the resulting increase in average NCFI of 13.3 percent.
  • In the Northern Great Plains, rising NCFI for the region’s cattle and calf businesses contributes to an expected 8.7-percent increase in average NCFI to $147,800 in 2017.
  • Average Mississippi Portal NCFI is expected to rise in 2017 to $98,600, driven primarily by expected growth in cotton cash receipts.
  • Heartland farm businesses—with expected higher hog, corn, and soybean cash receipts—are forecast to have an average NCFI of $144,100 in 2017, up 9.5 percent from 2016.
  • Farm businesses in the Eastern Uplands are expected to have average NCFI up more than 10 percent to $18,200 in 2017. For the Southern Seaboard, average NCFI in 2017 is expected to be up $1,800 (3.4 percent) from the 2016 value of $53,700.
  • Dairy’s forecast performance for 2017 is expected to affect many regions, contributing to a forecast 15.2-percent increase in average NCFI for the Northern Crescent to $75,200. Strong dairy sales also help mitigate the 5.7-percent decline in NCFI for the Fruitful Rim to $219,600. Offsetting the positive effect from dairy in the Fruitful Rim is a forecast 14.8-percent reduction in NCFI for farm businesses growing specialty crops 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 12 percent of U.S. farms are commercial and 33 percent are intermediate. "Residence farms" comprise the remaining 55 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 income statistics should not be interpreted as resulting solely from the production and sale of the commodity highlighted as the commodity specialization.