Farm Business Income

Suggested citation for linking to this discussion:

U.S. Department of Agriculture, Economic Research Service. Farm Sector Income & Finances: Farm Business Income, December 1, 2022.

Average Net Cash Farm Income for U.S. Farm Businesses Forecast up in 2022

Farm businesses are farms with annual gross cash farm income (GCFI)—i.e., annual income before expenses—of at least $350,000, or operations with less than $350,000 in annual gross cash farm income but that report farming as the operator's primary occupation. Farm businesses account for half of U.S. farms, but they contribute more than 90 percent of the farm sector's value of production and hold most of its assets and debt.

Average net cash farm income (NCFI) for farm businesses* is forecast at $110,600 in calendar year 2022, up 8.9 percent from 2021 in nominal terms. NCFI encompasses cash receipts from farming as well as farm-related income, including Government payments, minus cash expenses. Higher NCFI could mean more cash is available to reduce debt, pay taxes, cover family living expenses, and invest. NCFI is not a comprehensive measure of profitability because it does not account for changes in noncash income, including adjustments in farm inventory, accounts payable, accounts receivable, the imputed rental value of operator dwellings, and capital consumption.

The average NCFI forecast for 2022 is mixed among farming regions and commodity specializations**. In 2022, farm businesses specializing in dairy are forecast to see the largest dollar increase in average NCFI, while farm businesses specializing in specialty crops are forecast to see the largest dollar decrease in average NCFI compared with 2021. Among the nine resource regions (see the FAQ on ERS resource regions), farm businesses in the Northern Great Plains region are forecast to have the largest percent increase in average NCFI. Farm businesses in the Southern Seaboard region are forecast to have the largest percent decline in average NCFI. Despite higher total cash receipts for farm businesses in all regions, all major categories of farm businesses are expected to be affected by higher expenses and most are expected to see lower levels of average direct Government payments in 2022. See data tables on farm business average net cash income, including:

Outlook for Average Net Cash Farm Income by Type of Farm Business is Mixed

For all crop farm businesses—except those specializing in corn and soybeans—the average NCFI is forecast to decrease in 2022. Farm businesses specializing in specialty crops are expected to see the largest dollar ($39,600) and percentage (18.6 percent) decrease with average NCFI forecast at $173,200 in 2022. For these farm businesses, on average, growth in cash receipts is not expected to be enough to offset increases in cash expenses and declines in Government payments. In contrast, farm businesses specializing in corn are expected to see a 14.6 percent ($39,000) increase in average NCFI in 2022 compared with 2021. For the farm sector as a whole, corn cash receipts are forecast to increase 27.6 percent from 2021 to 2022.

Average net cash farm income for farm businesses specializing in crop production, 2022F compared with 2021
Farm specialization Average NCFI, 2022F Change in average NCFI, 2021–2022F
  Dollars per farm Percent
Cotton 526,100 –6
Corn 305,500 15
Wheat 140,500 –3
Soybeans 133,800 10
Specialty crops 1/ 173,200 –19
Other crops 84,300 –3
NCFI = net cash farm income; F = forecast.
1/ Specialty crops include fruit and tree nuts, vegetables, and nursery/greenhouse.
Source: USDA, Economic Research Service, Farm Income and Wealth Statistics data product, Farm business average net cash income by commodity specialization and region. Data as of December 1, 2022.

For farm businesses specializing in animals/animal products, average NCFI is forecast to increase in 2022 for those specializing in cattle and calves, poultry, and dairy. Average NCFI is forecast to decrease for farm businesses specializing in hogs and other livestock. The largest dollar and percentage increase in average NCFI is forecast for dairy farms, up $282,600 and 74.4 percent from the 2021 level per farm in 2022. Higher average cash receipts for dairy farm businesses in 2022 are expected to more than offset lower Government payments and increased production expenses. The largest dollar decrease in average NCFI is forecast for farms specializing in hogs, down from $496,100 in 2021 to $467,300 in 2022.

Average net cash farm income for farm businesses specializing in animals/animal products production, 2022F compared with 2021
Farm specialization Average NCFI, 2022F Change in average NCFI, 2021–2022F
  Dollars per farm Percent
Dairy 662,300 74
Hogs 467,300 –6
Poultry 115,000 15
Cattle/calves 23,400 24
Other livestock 2,000 –69
NCFI = net cash farm income; F = forecast.
Source: USDA, Economic Research Service, Farm Income and Wealth Statistics data product, Farm business average net cash income by commodity specialization and region. Data as of December 1, 2022.

Average Net Cash Farm Income is Forecast to Increase Across Most Regions

Regional performance of farm businesses can vary considerably because of the heavy geographic concentration of certain production specialties. Six of the nine ERS Farm Resource Regions are expected to see an increase in average net cash farm income in 2022 compared with 2021, in nominal dollars. Farm businesses in the Northern Great Plains region are forecast to see the largest dollar ($36,600) and percentage (26.3) increase because of the forecasted growth in corn, soybeans, and cattle/calves cash receipts. In contrast, farm businesses in the Southern Seaboard region are forecast to see the largest decrease in average NCFI at 11.8 percent ($6,000) per farm. This expected decrease is because of the forecast for higher production expenses and lower Government payments in 2022.


*Farm businesses are defined as operations with gross cash farm income of more than $350,000 (labeled "commercial") or smaller operations where farming is reported as the operator's primary occupation (labeled "intermediate"). The USDA’s Agricultural Resource Management Survey data for 2021 indicate that 10.9 percent of U.S. farms are commercial and 39.8 percent are intermediate. Residence farms comprise the remaining 49.3 percent of operations; these are small farms with operators whose primary occupation is something other than farming.

**Commodity specialization is determined by a farm business having at least 50 percent of the value of production from a particular commodity. Farm businesses often produce multiple commodities, so average net cash farm income statistics should not be interpreted as resulting solely from the production and sale of the commodity highlighted as the commodity specialization.