USDA Revised Forecast Shows Highest Farm Income Level Since 2013

USDA's Economic Research Service (ERS) updated the 2021 farm sector profit projections last week. The ERS now forecasts U.S. net farm income to increase by $18.4 billion from 2020 to $116.8 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 rental income.

At that new level, net farm income would be 24.2 percent above its 2000-2020 average of $94 billion and the highest since 2013.

Inflation-adjusted net cash farm income would be 16.9 percent above its 2000-2020 average of $113.8 billion and the highest since 2014. Production expenses are expected to grow by $16.3 billion during the same period, somewhat moderating income growth.

Additionally, direct government payments to farmers are projected to fall by $20.2 billion in 2021.

EDITOR’S TAKE:

Amazing, simply amazing! The highest net farm income in years. Think about that for just a second as you ponder who your best customers are likely to be in the months ahead. A lot of consumers will be tightening their spending simply because incomes are not keeping up with inflation. Many are left to chose between food, gas for their autos, insurance, etc. Meanwhile, farmers will be blessed with increased income in 2021. When you’re putting together your marketing plans for the remainder of this year and into 2022, it would be very wise to put farmers at the top of the list. Lead with AgPack which addresses their concerns with rising input costs and it can be a knockout punch!