Farm sector profits forecast to decline in 2018

U.S. net farm income is forecast to decline $5.4 billion (8.3 percent) to $59.5 billion in 2018, while U.S. net cash farm income is forecast to decline $6.7 billion (6.8 percent) to $91.9 billion (adjusted for inflation). The forecast declines are the result of changes in cash receipts and production expenses. Additionally, Government payments are forecast to decline $2.3 billion (20.0 percent) in inflation-adjusted terms; this is due largely to a forecast slight recovery in prices for many crops covered by the Price Loss Coverage program, combined with lower Agriculture Risk Coverage program revenue guarantees due to lower recent commodity prices for the crops covered under that program. If realized, 2018 net farm income would be the lowest since 2002 and net cash farm income would be at its lowest level since 2009. Both profitability measures remain below their 2000-16 averages, which included substantial increases in crop and animal/animal product cash receipts from 2010 to 2013. Net cash farm income includes cash receipts from farming as well as farm-related income, including government payments, minus cash expenses. Net farm income is a more comprehensive measure of profits that incorporates noncash items, including changes in inventories, economic depreciation, and gross imputed rental income. Find additional information and analysis on ERS’s Farm Sector Income and Finances topic page, released February 7, 2018.