AFBF: Increased Commodity Prices Pushing Net Farm Income Higher

For fiscal year 2021, the Department of Agriculture projects net farm income to increase $18.5 billion, 19.5% over last year’s figure. Veronica Nigh, American Farm Bureau Federation Senior Economist, said that forecast puts net farm income at the highest level since 2013.

“We hit a low of $62 billion back in 2016. So, reaching $113 billion in 2021 is certainly an impressive turnaround for the sector. 68% of that increase in receipts, is due to a price impact, which means about 30 percent of that increase is due to increases in the quantity sold.”

She said the jump in net farm income is thanks, largely to an increase in commodity prices.

“On the crop side, obviously a significant increase in receipts from corn, soybeans and wheat, which are forecast to increase by $38 billion. But it's not all good news on the crop side, unfortunately, for specialty crop growers, vegetable and melon and fruit and nut cash receipts are projected down by over $4 billion. On the animal products, we're looking at an increase of $26 billion. On the dairy side, basically no change, which is the third year in a row, unfortunately, for our dairy sector that we haven't seen an increase.”

Meanwhile, Nigh says USDA projects total farm expenses up 7% from last year, influenced primarily by an increase in fuel and oil prices, fertilizer prices, and labor expenses. She added 7% is equivalent to about a $26 billion increase.

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