USDA’s Economic Research Service (ERS) forecasts inflation-adjusted net cash farm income (NCFI)—gross cash income minus cash expenses—to increase by $19.8 billion (17.2 percent) from 2020 to $134.7 billion in 2021.
U.S. net farm income (NFI) is forecast to increase by $15 billion (15.3 percent) from 2020 to $113 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 imputed rental income. If this forecast is realized, NFI would be 20.4 percent above its 2000-2020 average and would be the highest since 2013. NCFI would be 18.9 percent above its 2000-2020 average and would be the highest since 2014.
Underlying these forecasts, cash receipts for farm commodities are projected to rise by $51.2 billion (13.8 percent) from 2020 to 2021, their highest level since 2015. Production expenses are expected to grow by $12.9 billion (3.5 percent) during the same period, somewhat moderating income growth.
Additionally, direct government payments to farmers are expected to fall by $19.3 billion (40.8 percent) in 2021 compared with 2020’s record-high payments. This decline is largely caused by lower anticipated payments from supplemental and ad hoc disaster assistance for COVID-19 relief. — USDA ERS