Farm Sector Profits Forecasted to Increase in 2021
A new reports forecasts farm income this year to be the highest since 2013.
A Department of Agriculture report projects farm income for 2021 to increase by $18.5 billion, or 19.5 percent. At $113.0 billion, net farm income would be at its highest level since 2013 and 20 percent above its 20-year average of $93.9 billion. In inflation-adjusted 2021 dollars, USDA expects net farm income to rise $15.0 billion in 2021 from the previous year. USDA expects net cash farm income to increase by $23.8 billion, or 21.5 percent, to $134.7 billion in 2021.
Net cash farm income encompasses cash receipts from farming as well as farm-related income, including government payments, minus cash expenses. Lower direct Government payments and higher production expenses in 2021 are expected to only partially offset higher cash receipts.
The expected decrease is largely because of lower supplemental and ad hoc disaster assistance for COVID-19 relief in 2021 compared to 2020.
USDA predicts production expenses to increase 7.3 percent to $383.5 billion in 2021.