Farm Business Income

Suggested citation for linking to this discussion:

U.S. Department of Agriculture, Economic Research Service. Farm Sector Income & Finances: Farm Business Income, February 4, 2022.

Average Net Cash Farm Income for U.S. Farm Businesses Relatively Stable In 2022

Farm businesses are farms with annual gross cash farm income (GCFI) of at least $350,000 or operations with less than $350,000 in annual gross cash farm income but in which farming is reported as the operator's primary occupation. Farm businesses account for 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.

Average net cash farm income (NCFI) for farm businesses* is forecast at $91,500 in 2022, up 1.8 percent from the forecast for 2021 in nominal terms. This increase is lower than inflation projected at 3.6 percent for 2022. Higher NCFI would mean that more cash is available to pay down debt, taxes, cover family living expenses, and invest. NCFI is not a comprehensive measure of profitability 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.

The average NCFI forecast for farm businesses is mixed among farming regions and commodity specializations. In 2022, farm businesses specializing in dairy are forecast to see the largest increase in average NCFI while farm businesses specializing in hogs are forecast to see the largest decrease in average NCFI compared with 2021. Among the nine resource regions (see the FAQ on ERS resource regions), farm businesses in the Northern Crescent region are forecast to have the largest percent increase while farm businesses in the Basin and Range region are forecast to have the largest percent decline in average NCFI. All major categories of farm businesses are expected to be affected by lower levels of average direct Government payments and higher expenses in 2022. See data tables on farm business average net cash income, including:

Average Net Cash Farm Income Outlook for Farm Businesses Varies by Specialization

For crop farm businesses, the forecast for average NCFI is mixed in 2022. Those specializing in cotton, soybeans, and corn are forecast to see increases relative to 2021; those specializing in specialty crops, wheat, and other crops are forecast to decline. Farm businesses specializing** in cotton are expected to see the largest increase ($57,600 or 19.6 percent) among crop commodities with NCFI forecast at $351,800 in 2022. For these farm businesses, growth in cash receipts is forecast to more than offset increases in cash expenses and declines in Government payments. Similarly, higher cash receipts in 2022 for farm businesses specializing in soybeans and corn are expected to lead to slightly higher average NCFI in 2022. In contrast, farm businesses specializing in specialty crops (fruit and tree nuts, vegetables, and nursery/greenhouse) are expected to see the largest dollar ($30,400) and percentage (20.9 percent) decline in average NCFI in 2022 compared with 2021. The decline is driven by lower Government payments and higher expenses.

Average net cash farm income for farm businesses specializing in crop production, 2022F compared with 2021F
Farm specialization Average NCFI, 2022F Change in average NCFI, 2021F–22F
  Dollars Percent
Cotton $351,800 20
Corn $256,400 1
Wheat $164,800 -7
Soybeans $152,500 2
Specialty crops 1/ $114,900 -21
Other crops $64,900 -2

NCFI = net cash farm income; F = forecast.
1/ Specialty crops include fruits and tree nuts, vegetables, and nursery/greenhouse. 
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 4, 2022.

For farm businesses specializing in animals/animal products, average NCFI is forecast to increase in 2022 for those specializing in dairy, cattle/calves, and poultry and to decrease for those specializing in hogs and other livestock. The largest dollar and percentage increase in average NCFI is forecast for dairy farms (up $140,000 to $382,100 and up 57.8 percent per farm) in 2022. Higher cash receipts for dairy in 2022 are expected to more than offset lower Government payments and increased production expenses. The largest dollar decrease is for farms specializing in hogs (down $95,800 to $341,100 per farm) in 2022.

Average net cash farm income for farm businesses specializing in animals/animal products production, 2022F compared with 2021F
Farm specialization Average NCFI, 2022F Change in average NCFI, 2021F–22F
  Dollars Percent
Dairy $382,100 58
Hogs $341,100 -22
Poultry $130,500 3
Cattle/calves $20,000 5
Other livestock $2,700 -49
NCFI = net cash farm income; F = forecast.
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 4, 2022.

Average Net Cash Farm Income Forecast is Mixed for Farm Businesses by Region

Regional performance of farm businesses can vary considerably because of the heavy geographic concentration of certain production specialties. Six of the nine resource regions are expected to see an increase in nominal average net cash farm income in 2022 compared with 2021. Farm businesses in the Northern Crescent region are forecast to see the largest dollar ($10,700) and percentage increase (16 percent) in average NCFI per farm. These expected increases are because of the large number of dairy farms in this region and the forecast for higher milk cash receipts in 2022. Farm businesses in the Basin and Range region are forecast to see the largest percent decrease in average NCFI at 11 percent ($4,000) per farm following declines in Government payments and higher expenses.


*Farm businesses are defined as operations with gross cash farm income of more than $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 2020 indicate that 10.8 percent of U.S. farms are commercial, and 39.5 percent are intermediate. Residence farms comprise the remaining 49.7 percent of operations; these are small farms with operators 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.