Farm sector profits forecast to reach record highs in 2022
USDA’s Economic Research Service forecasts inflation-adjusted U.S. net cash farm income (NCFI)—gross cash income minus cash expenses—to increase by $30.1 billion (19.1 percent) to $187.9 billion in 2022. This total would be the highest on record for the inflation-adjusted data series. U.S. net farm income (NFI) is forecast to increase by $10.7 billion (7.2 percent) to $160.5 billion in 2022, its highest level since 1973 after adjusting for inflation. Net farm income is a broader measure of farm sector profitability that incorporates noncash items such as changes in inventories, economic depreciation, and gross imputed rental income. Cash receipts from farm commodities drive these income increases, with a projected increase of $78.5 billion (17.0 percent) to $541.5 billion, their highest level on record. In addition, total commodity insurance indemnities paid to farmers are expected to rise by $8.3 billion (70.1 percent) to $20.2 billion, also a record. Production expenses are forecast to increase by $46.6 billion (11.8 percent) to $442.0 billion in 2022, offsetting some income growth. Additionally, direct Government payments to farmers are projected to decrease by $11.0 billion (40.0 percent) from 2021 to $16.5 billion in 2022, mainly because of lower anticipated USDA and non-USDA payments for Coronavirus (COVID-19) pandemic assistance. Find additional information and analysis on the ERS topic page for Farm Sector Income and Finances, reflecting data released on December 1, 2022.
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