Highlights From the November 2017 Farm Income Forecast
Farm Sector Profits Expected To Stabilize in 2017
After 3 consecutive years of decline, farm sector profits are forecast to be relatively stable in 2017. Net farm income, a broader measure of profits, is forecast to increase $1.7 billion (2.7 percent) from 2016 to $63.2 billion in 2017 and net cash farm income is forecast to increase $3.7 billion (3.9 percent) to $96.9 billion. In inflation-adjusted dollars, net farm income is forecast to be relatively unchanged from 2016 and net cash farm income is forecast to increase 2.1 percent. The stronger forecast growth in net cash farm income is largely due to an additional $2.1 billion (nominal) in cash receipts from the sale of beginning-of-year crop inventories. The net cash farm income measure counts those sales as part of current-year income while the net farm income measure counts the value of those inventories as part of prior-year income. Despite the forecast upturn in these profit measures relative to 2016, 2017 levels would be below all other years since 2009 (net farm income) and since 2010 (net cash farm income).
Cash receipts are forecast to rise $8.6 billion (2.4 percent) in 2017 to $365.1 billion, led by a $12.4-billion (7.6 percent) increase in animal/animal product receipts. Dairy, poultry/egg, hog, and cattle/calf receipts are up, reflecting expected increases in both price and quantity sold. Overall, cash receipts for crops are forecast to fall $3.8 billion (2.0 percent) to $189.9 billion, largely reflecting expected declines in fruit/nut and soybean cash receipts. Direct government farm payments—which include farm program payments paid directly to farmers and ranchers but not insurance indemnity payments made by FCIC or USDA loans—are forecast to decline $1.8 billion (13.8 percent) in 2017 to $11.2 billion as large declines in Agricultural Risk Coverage payments more than offset increases in Price Loss Coverage payments.
The 2017 forecast for farm business average net cash farm income is $102,000, slightly lower than the 2016 forecast of $102,800. Increases in average net cash income are forecast for livestock and cotton farm businesses, while declines are forecast for all other types of crop farm businesses.
After declining for 2 consecutive years, total production expenses are forecast up $5.3 billion (1.5 percent) to $355.8 billion in 2017, led by increases in expenditures on interest, hired labor, and fuels/oil. Partially offsetting these increases are expected drops in feed and fertilizer/lime expenses. In inflation-adjusted dollars, total production expenses are forecast to remain flat in 2016.
Farm asset values are forecast to increase by $81.1 billion (2.7 percent) to $3.0 trillion in 2017, and farm debt is forecast to increase by $11.0 billion (2.9 percent) to $385.2 billion. Farm sector equity, the net measure of assets and debt, is forecast up by $70.1 billion (2.7 percent) to $2.65 trillion in 2017. The increase in assets reflects a 3.3-percent rise in the value of farm real estate. The rise in farm debt is driven by higher real estate debt (up 4.6 percent).
Median Income of Farm Operator Households Expected To Be Relatively Unchanged in 2017
Farm households typically receive income from both farm and off-farm sources. The total median income of U.S. farm households increased steadily over 2010-14, reaching an estimated $81,637 in 2014. Median household income, which fell 6 percent in 2015 and remained flat in 2016, is forecast to rise 1.7 percent in 2017 to $77,551 in nominal terms (0.2 percent when adjusted for inflation). Median farm income earned by farm households is estimated at -$940 in 2016 and is forecast at -$1,093 in 2017. In recent years, slightly more than half of farm households have lost money on their farming operations each year. Most of these households earn positive off-farm income—and median off-farm income is forecast to increase 2.3 percent, from $66,468 in 2016 to $67,973 in 2017. (Because farm and off-farm income are not distributed identically for every farm, median total income will generally not equal the sum of median off-farm and median farm income.)
- Farm Sector Income and Finances for a discussion of the full farm sector income forecast.
- Farm Household Well-being for a discussion of the farm household income forecast.
- Farm Income and Wealth Statistics for the complete 2017 farm income forecast data and full history of U.S. and State farm sector estimates.
- Charts and Maps About Your State, Charts and Maps of U.S. Farm Sector Balance Sheet Data, and Charts and Maps of U.S. Farm Income Statement Data for farm sector data visualizations.
- Farm Household Income and Characteristics for data related to farm household income and characteristics.
- ARMS Farm Financial and Crop Production Practices data that underpin the farm income forecast and estimates.