Highlights From the August 2017 Farm Income Forecast
Upturn in Farm Sector Profits Expected in 2017
After 3 consecutive years of decline, farm sector profits are forecast to increase in 2017. Net cash farm income for 2017 is forecast at $100.4 billion, up $11.2 billion (12.6 percent) from 2016. Net farm income, a broader measure of profits, is forecast at $63.4 billion, up $1.9 billion (3.1 percent) relative to 2016. The stronger forecast growth in net cash income is largely due to an additional $9.7 billion in cash receipts from the sale of crop inventories. The net cash farm income measure counts those sales as part of current-year income while the net farm income measure counted the value of those inventories as part of prior-year income. Despite the forecast upturn in these profit measures relative to 2016, levels would be below all other years since 2010 (net farm income) and since 2011 (net cash farm income).
Cash receipts are forecast to rise $14.1 billion (4.0 percent) in 2017, led by a $13.6-billion (8.4 percent) increase in animal/animal product receipts. Dairy, poultry/egg, and hog receipts are up, reflecting expected increases in both price and quantity sold. Cattle/calf receipts are up, reflecting expected increases in the quantity sold. Overall, cash receipts for crops are forecast to remain mostly unchanged from 2016 as expected increases for some crops are offset by declines in others. Soybean, cotton, and vegetable/melon cash receipts are forecast to rise, while fruit/nut cash receipts are forecast to fall. Direct government payments are forecast to remain at just under $13.0 billion in 2017.
The 2017 forecast for farm business average net cash farm income is up by 5.8 percent, with the largest increases for farms specializing in dairy (up 42 percent), hogs (up 38 percent) and cotton (up 31 percent). The only declines in average net cash income are for farms specializing in specialty crops (down 15 percent) and other livestock (less than 1 percent).
After declining for 2 consecutive years, total production expenses are forecast up $4.6 billion (1.3 percent), led by increases in expenditures on interest, hired labor, and fuels/oil. Partially off-setting these increases are expected drops in feed and fertilizer/lime expenses.
Farm asset values are forecast to increase by 4.0 percent in 2017, and farm debt is forecast to increase by 4.4 percent. Farm sector equity, the net measure of assets and debt, is forecast up by $101.8 billion (3.9 percent) in 2017. The increase in assets reflects a 4.6-percent rise in the value of farm real estate. The rise in farm debt is driven by higher real estate debt (up 7.5 percent).
Median Income of Farm Operator Households Expected To Remain Level in 2017
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, is forecast to remain level at $76,831 in 2017. Median farm income earned by farm households in 2016 is estimated to be negative at -$940 and forecast to dip slightly (to -$1,325) 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 next year, from $66,468 in 2016 to $67,969 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.