USDA Updates 2021 Farm Income Forecast

USDA’s Economic Research Service updated farm sector profit projections Wednesday, which are expected to increase in 2021. ERS forecasts inflation-adjusted net cash farm income, which is gross cash income minus cash expenses, to increase $12.6 billion to $133 billion. U.S. net farm income is forecast to increase by $18.4 billion from 2020 to $116.8 billion in 2021. Net farm income is a broader measure of farm sector profitability that incorporates noncash items, including changes in inventories, economic depreciation, and gross rental income.

At that level, net farm income would be 24.2% above its 2000–2020 average of $94 billion and the highest since 2013. Inflation-adjusted net cash farm income would be 16.9 percent above its 2000–2020 average of $113.8 billion and the highest since 2014. Production expenses are expected to grow by $16.3 billion during the same period, somewhat moderating income growth. Additionally, direct government payments to farmers are projected to fall by $20.2 billion in 2021.

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