Farm Sector Profits Forecast to Increase in 2021
Net cash farm income increased by $9.2 billion (8.6 percent) in 2020 relative to 2019 and is forecast to increase by $17.0 billion (14.7 percent) to $133.0 billion in 2021 relative to 2020. When adjusted for inflation, net cash farm income is forecast to increase by $12.6 billion (10.5 percent) from 2020. Net cash farm income in 2021 would be at its highest level since 2014 and 16.9 percent above its 2000–20 average of $113.8 billion. Net cash farm income encompasses cash receipts from farming as well as farm-related income (including Government payments) minus cash expenses. It does not include noncash items—including changes in inventories, economic depreciation, and gross imputed rental income of operator dwellings—reflected in the net farm income measure above.
Cash receipts from the sale of agricultural commodities are forecast to increase by $64.7 billion (17.8 percent, in nominal terms) from 2020 to $427.3 billion in 2021, driving most of the increase in both net income measures. Total crop receipts are expected to increase by $35.4 billion (17.9 percent) from their 2020 level following higher receipts for corn, soybeans, and wheat. Total animal/animal product receipts are expected to increase by $29.3 billion (17.7 percent) with increases in receipts for broilers, cattle/calves, and hogs.
Lower direct Government payments and higher production expenses in 2021 are expected to partially offset higher cash receipts. Direct Government payments, after increasing by $23.2 billion (103.5 percent) in 2020 relative to 2019, are forecast to fall by $18.5 billion (40.4 percent) from $45.7 billion in 2020 to $27.2 billion in 2021. The decrease is expected because of lower supplemental and ad hoc disaster assistance for COVID-19 relief in 2021 compared with 2020.