Farm Sector Profits Forecast to Decrease in 2021

The USDA is forecasting net farm income to decrease $9.8 billion, or 8.1% in 2021, to $11.4 billion. The decline is largely driven by less expected government assistance to producers. In inflation-adjusted 2021 dollars, net farm income is forecast to decrease $12 billion in 2021 after increasing $37.8 billion in 2020 to its highest level since 2013. Despite the decline, 2021 net farm income would be 21% above its 2000-19 decade average of $92.1 billion.

After increasing a forecasted $27.3 billion in 2020, net cash farm income is forecast to decrease $7.9 billion to $128.3 billion in 2021. Net cash farm income encompasses cash receipts from farming and farm-related income, including government payments, minus cash expenses.

Cash receipts are forecast to increase in 2021, but lower direct government farm payments are expected to drive most of the decline. Cash receipts for all commodities are forecast to increase $20.4 billion, or 5.5%, to $390.8 billion in 2021.

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