Updated Outlook for the U.S. Farm Economy
Prior to the Agriculture Department’s August 2018 Farm Income Forecast, net farm income, a broad measure of farm profitability, was projected in 2018 to be at the lowest level in more than a decade at $59.5 billion. This forecast, published in February, represented a drop in farm income of more than 50 percent, or $64 billion, from 2013’s high. It would have been the largest ever five-year decline in farm income.
Now, following USDA’s August update, net farm income is projected at $65.7 billion—the third-lowest level over the last decade, behind 2016 and 2009. While net farm income is still projected to be 13 percent lower than 2017 levels, it is no longer expected to sink to decade-low levels. Instead, higher projections of gross farm income more than offset higher gross expenses.
Net farm income is watched so closely because it is a comprehensive indicator of U.S. farm profitability – for all crops and livestock – and includes cash receipts from farming as well as farm-related income, including government payments and non-cash items like changes in inventories, economic depreciation and gross imputed rental income, minus cash expenses.
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