USDA’s Economic Research Service forecasts inflation-adjusted U.S. net cash farm income to increase by $13.5 billion or 8.7 percent from 2021. Net cash farm income is gross cash income minus cash expenses and will reach $168.5 billion in 2022, the highest level since 2012. In comparison, net farm income is forecast to drop by almost $1 billion from 2021 to $147.7 billion this year. That drop comes after net farm income increased by $44 billion in 2021 to the highest level since 2013.
Net farm income is a broader measure of farm sector profitability that incorporates noncash items, including inventory changes, economic depreciation, and gross rental income. Both cash receipts and expenses are forecast to increase. Cash receipts for farm commodities are projected to rise by $66.3 billion or 14 percent from the previous year to reach $525.3 billion this year. Production expenses will also increase by $44 billion to $437.3 billion.
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2022 Farm Sector Income Forecast
Net farm income, a broad measure of profits, is forecast to increase by $7.3 billion (5.2 percent) from 2021 to $147.7 billion in calendar year 2022. This expected increase follows an increase of $45.9 billion (48.5 percent) in 2021 from 2020. Net cash farm income is forecast to increase by $22.1 billion (15.1 percent) to $168.5 billion in 2022, after an increase of $29.6 billion (25.4 percent) in 2021. In inflation-adjusted dollars, 2022 net farm income is forecast to decrease by $0.9 billion (0.6 percent); net cash farm income is forecast to increase by $13.5 billion (8.7 percent) compared with the previous year. If realized, net farm income and net cash farm income in 2022 would remain above their 2002–21 average (in real terms).
Note: In the text below, year-to-year changes in the major aggregate components of farm income are discussed only in nominal dollars unless the direction of the change is reversed when looking at the component in inflation-adjusted dollars.
Overall, farm cash receipts are forecast to increase by $91.7 billion (21.2 percent) to $525.3 billion in 2022 in nominal dollars. Total crop receipts are forecast to increase by $36.4 billion (15.3 percent) from 2021 levels to $274.2 billion. Receipts for soybeans are forecast to increase by $14.9 billion (30.6 percent), corn by $11.9 billion (16.7 percent), and wheat by $4.0 billion (33.7 percent) in 2022, accounting for most of the forecasted growth in crop cash receipts. Total animal/animal product receipts are expected to increase by $55.3 billion (28.3 percent) to $251.1 billion, following increases in receipts for all commodity categories.
Direct Government farm payments are forecast at $13.0 billion in 2022, a $12.8 billion (49.7 percent) decrease from 2021 levels. Direct Government farm payments include …….
National Correspondent / AgNet Media, Inc.
Sabrina Halvorson is an award-winning journalist, broadcaster, and public speaker who specializes in agriculture. She primarily reports on legislative issues and hosts The AgNet Weekly podcast. Sabrina is a native of California’s agriculture-rich Central Valley.