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 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 $104,500 in nominal terms in 2020, up 32.6 percent from 2019. Higher NCFI means more cash could be 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 all farming regions and almost all commodity specializations, largely because of higher levels of direct Government payments and lower expenses. However, farm businesses specializing in poultry are forecast to see a decrease in average NCFI in 2020, largely because of lower cash receipts. See data tables on farm business average net cash income, including: 

Note: These forecasts were revised from the September 2, 2020 release following the revision to farm sector income forecasts and updates to our methods to better reflect the expected distribution of direct Government payments in 2020. See Update and Revision History for more information.

Average Net Cash Farm Income (NCFI) Outlook for Nearly All Farm Businesses are Forecast Up

Average net cash farm income for farm businesses specializing** in all types of crop production is forecast to increase by 33 to 50 percent in 2020. All crop farm businesses are expected to benefit from higher Government payments in 2020 compared with 2019. Farm businesses specializing in cotton are expected to see the largest dollar increase in average net cash farm income at $114,500.  Farm businesses specializing in wheat are expected to see the largest percentage increase at 50.0 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 $160,500 49.6
Corn $190,900 33.2
Soybeans $110,500 42.4
Cotton $366,800 45.4
Specialty crops 1/ $262,200 19.2
Other crops $80,400 41.5
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 December 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 increase from 2019 for all specialization categories except poultry. The largest dollar increases in average NCFI is for farms specializing in dairy, which is expected to rise by $72,700 to $333,300 per farm. But average NCFI for poultry farms is forecast to decrease by $2,500 to $139,100 per farm. Poultry 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 $27,900 42.3
Hogs $386,700 13.2
Poultry $139,100 -1.8
Dairy $333,300 27.9
Other livestock $17,800 45.9
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 December 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. However, all resource regions (see the FAQ on ERS resource regions) are expected to see average NCFI increase in 2020 by more than 20 percent. Farm businesses in the Fruitful Rim are forecast to see the largest dollar increase in average NCFI at $52,600 per farm. These expected increases are largely because of higher Government payments and fruit/nut cash 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.

Last updated: Wednesday, December 02, 2020

For more information, contact: Farm Income Team